With the lifting of lockdown restrictions and pick-up in economic activity, the goods and services tax collections surged to an all time high of over Rs 1.15 lakh crore in December, adding solace to the Narendra Modi-government’s desire for revenue in the coronavirus-hit economy.

At Rs 1.15 lakh crore, the collections were 10 per cent more than the mop-up in the previous month — the biggest growth in monthly revenues in the last 21 months.

The increase in tax collections was because of the “combined effect of the rapid economic recovery post-pandemic and the nationwide drive against GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance”, the finance ministry said in a statement.

The mop-up from the GST, which is levied when a consumable item is sold or a service such as travel booking rendered, in December was 12 per cent higher than such receipts in the same month of 2019.

The finance ministry said the December collections were the highest ever since the implementation of the nationwide tax in July 2017. The previous best was in April 2019 when Rs 1.13 lakh crore was collected.

This is the third straight month of over Rs 1 lakh crore tax collections and the fourth consecutive month this
fiscal when collections have outperformed comparable months of 2019.

EY tax partner Abhishek Jain said the GST collections touching a record high despite the fact that we are not completely out of the pandemic indicates a remarkable recovery in the economy. “Some of it could also be due to the plugging of revenue leakage by the government on account of fake credits through fraudulent invoicing and introduction of e-invoicing,” he said.