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Fiscal Developments 51

2.10 The indirect tax receipts have registered a YoY growth of 38.6 per cent in the first eight
months of this fiscal year. The rise in imports of goods and services ensued due to the recovery
in both manufacturing sector and consumption demand, have led to a rise in customs collection.
The revenue collection from customs during April to November 2021 has registered a growth
of almost 100 per cent over April to November 2020 and over 65 per cent compared to April to
November 2019.

2.11 The revenue from excise duties has registered a YoY growth of 23.2 per cent during April-
November 2021. The Government had raised the excise duty on petrol and diesel to garner
revenues during the year 2020-21, when the collection of other direct and indirect taxes was
adversely impacted by COVID-19 and low global petroleum prices created some elbow-room
for raising taxes on petroleum. The revenue from excise duty registered an YoY growth of more
than 60 per cent in 2020-21 PA. However by the end of November 2021, when the global oil prices
had increased, other tax revenue sources had recovered and inflationary pressures were building
up in the economy, the government changed its’ policy as per the requirement of the situation,
and the Central excise duty on petrol and diesel was reduced. Such a responsive feedback-based
policy making by the Government is imperative for ensuring efficient management of limited
fiscal resources in the economy. The Revised Estimates would give more clarity on the impact
of excise duty cut on the tax revenue during the current year.

2.12 With the revival of the economy, the Goods and Services Tax has emerged as a buoyant
source of revenue for both the Centre and the States. The GST collections for the Centre were
61.4 per cent of BE during April to November 2021. Gross GST collections, Centre and States
taken together, were `10.74 lakh crore during April to December 2021, which is an increase
of 61.5 per cent over April to December 2020 and 33.7 per cent over April to December 2019.
Notably, the average monthly gross GST collection for the third quarter of the current year was
` 1.30 lakh crore, higher than the average monthly collection of ` 1.10 lakh crore and
` 1.15 lakh crore in the first and second quarters respectively.

2.13 After falling during the phase of nationwide lockdown in 2020-21 and during the second
COVID-19 wave in India, there was a quick recovery in monthly GST collections. Figure 7
shows that the impact of the second wave of COVID-19 on GST collections was much more
muted than the impact of nationwide lockdown during the first wave. Over the last 4 years, GST
revenues have steadily grown and the year-average of monthly GST collection has increased
from 0.9 lakh crore in 2017-18 to 1.19 lakh crore in 2021-22 (upto December) (Figure 8). The
improvement in GST collections has been due to the combined effect of the rapid economic
recovery post pandemic, the nation-wide drive against GST evaders and fake bills along with
many systemic changes introduced recently, and various rate rationalization measures undertaken
by the GST Council to correct inverted duty structure.