As expected, the goods and services tax (GST) collections in April have surpassed the Rs 1 lakh crore mark for the first time since the new tax regime was rolled out on July 1, 2017. Though the high numbers may represent the year-end push and adjustments, it is clear that tax compliance is steadily improving. Being the last month of the financial year, people may have tried to pay arrears, making it difficult to view the jump in collections as a trend.

The finance ministry said in a statement that the buoyancy could be attributed to economic recovery and improvement in compliance, adding that the payment of tax arrears could have partly inflated the numbers.

With the introduction of e-way bill system now, the tax collection is expected to improve in the coming months, thanks to the electronic tracking of movement of goods and invoice matching. This will surely become a deterrent for tax evaders looking to keep transactions off their books or to play down their turnover.

With tax compliance improving, the government can be hopeful of increasing tax collections in the current fiscal year. Everyone is now keenly awaiting the upcoming GST Council meeting on Friday (May 4) wherein the new return-filing mechanism is expected to be announced.

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