Monthly GST collections are becoming a barometer of sorts to gauge the state of the economy. Using that as a basis, the October 2024 data would suggest that all is well in the Indian economy.

Thanks to pick-up in domestic sales and better compliance, gross GST collection in October rose 9 per cent to over ₹1.87 lakh crore, the second highest after ₹2.10 lakh crore in April 2024.

Central GST collection stood at Rs 33,821 crore, state GST at Rs 41,864 crore, integrated IGST at Rs 99,111 crore and cess at Rs 12,550 crore during the month.

The GST revenue data does not highlight how much of the revenue is due to non-economic factors, such as better compliance and aggressive assessments, which undoubtedly contribute to the increase in revenue.

Taxpayers have generally complied with the GST laws. E-invoicing has reduced the threat of false invoicing to take advantage of a non-existent tax credit. However, GST assessments remain overly aggressive and focus solely on revenue collection.

The GST Tribunals are not being set up at the pace necessary to handle the huge number of appeals that are sure to pile up. The Central Board of Indirect Taxes and Customs (CBIC) should intervene to ensure that assessments are carried out smoothly and that only deserving cases end up in Courts. You can do this by publishing circulars that are clear and easily understood by everyone, unlike some of the current circulars.

For example, Section 128A and Rule 164 were inserted in the GST law through different notifications to provide for exemption of interest or penalty, or both, for some financial years, provided the tax is paid before March 31, 2025.

Despite this, many questions remained unanswered, forcing the CBIC to publish Circular No. 238/32/2024-GST, which, in more than 15 pages, clarified issues regarding the submission of the application, payment of tax and processing of applications and issuance of orders.

How is it where the base is?

Over the last year, the GST Council appears to have liked the phrase “as is, where basis is” to complete past assessments relating to tax rate changes made by the Council. Without guidance on defining the term, taxpayers have been concerned about how aggressively assessing officials would interpret the phrase. Circular No. 236/30/2024 attempts to provide some guidance on this issue.

In the context of GST, the phrase “regularized as is and where is” means that payment made at a lower rate or exemption claimed by the taxpayer will be accepted and no refund will be made if the tax has been paid at the higher rate.

It is stated that the intention of the GST Council is to regularize the payment at a lower rate, including nil rate, due to the tax position adopted by the taxable person, as a complete relief from tax liability.

It is not sure whether the circular clarifies many of the questions taxpayers had about ‘as is and where is’ assessments.

Aside from some inconsistencies, GST rates appear to be at reasonable levels. Taxpayers have become accustomed to frequent changes in laws and the portal. Remaining areas of concern are unclear circulars and lack of detailed instructions on how to complete assessments. If these are addressed, there is no reason why the monthly GST revenue should not exceed ₹2 lakh crore regularly.

The author is a public accountant.