Indian stock markets gain 1% as March GST collection at record high

01 Apr , 2021 By : Kanchan Joshi

MUMBAI: Indian equities on Thursday surged over 1?ter the government said goods and services tax (GST) collection for March was at a record high. Investors also cheered vaccination progress in India, with the government, as of today, allowing shots to be administered to all those above 45 years.

At 3pm, the Sensex was up 0.95% at 49979 points, while the Nifty advanced 1.1% to 14867 points.

Central and state governments collected Rs1.24 trillion in goods and services GST revenue in March, a record since the new indirect tax regime was rolled out in 2017.

The revenue growth was aided by the government’s drive against fake invoices and rule changes meant to ensure that transaction details are reported in time by businesses. The highest ever monthly GST revenue collection comes at the end of a financial year in which the economy suffered a major stress on account of the pandemic.

Analyst said the numbers were clear indicators of rapid economic recovery post the pandemic.

This was the fourth consecutive month when GST collection have topped Rs1 trillion on the back of improving compliance and recovery in economic activities.

In another statement, the government said it has released additional tax devolution of Rs45,000 crore to states for fiscal 2021.

"The healthy GST collections in the month of March 2021, along with the additional devolution of Rs. 45,000 crores to the state governments for the just-concluded fiscal, confirm our view that the tax revenues in FY2021 have exceeded the RE. As a result, we continue to expect the GoI's fiscal deficit to undershoot the FY2021 RE of Rs. 18.5 trillion, suggesting ample cash balances at the start of FY2022," ratings agency Icra said.

However, some analysts advised caution given the rising coronavirus infections in the country. India saw the biggest daily surge in covid cases since early October, with 72,330 fresh infections reported over the past 24 hours.

Asian equities were also higher today as investors assessed US President Joe Biden's infrastructure stimulus plans.