GST Return Filings Surge by 65% in 5 Years: A Boost in Taxpayer Compliance

The Finance Ministry recently reported a significant surge of approximately 65% in the number of GST return filers, reaching 11.3 million over a five-year period until April 2023. This remarkable increase is attributed to improved compliance by taxpayers, signaling a positive trend in GST-related activities.

In addition to the rise in GST return filers, the number of active taxpayers registered under the Goods and Services Tax increased from 10.6 million in April 2018 to an impressive 14 million. This growth indicates a substantial expansion in the tax base and underscores the widespread acceptance and implementation of the GST system.

According to data shared by the ministry, there has been a substantial improvement in the filing behavior of eligible taxpayers. In the current fiscal year, 90% of eligible taxpayers are filing GSTR-3B returns by the end of the filing month, compared to 68% in the initial year of GST rollout in 2017-18. This positive shift is attributed to the simplification of rules and procedures in GST, fostering a more user-friendly environment for taxpayers.

The nationwide rollout of the Goods and Services Tax on July 1, 2017, marked a significant shift in India's taxation landscape. The GST amalgamated numerous local taxes, streamlining the taxation process and contributing to enhanced compliance.

The GSTR-3B filings witnessed substantial growth, increasing from 7.24 million in April 2018 to an impressive 11.3 million as of April 2023. GSTR-3B serves as the monthly return form for filing details of outward supplies and tax payments, and the surge in its submissions reflects a robust and expanding tax ecosystem.

The finance ministry emphasized that effective policy and systemic changes in GST have contributed to the improved compliance level over the years. The consistent increase in return filings across the years indicates a positive trajectory in compliance, showcasing the success of GST reforms.

Monthly GST collections reached Rs 1.68 trillion in November, marking the sixth occasion that gross GST collections exceeded the Rs 1.60 lakh crore threshold in the current fiscal year. Finance Minister Nirmala Sitharaman highlighted the upward trend in annual GST collection since its inception, with an average gross monthly collection of Rs 1.66 trillion in the current fiscal.

In April, GST collections reached a record high of Rs 1.87 trillion, underscoring the resilience and effectiveness of the GST framework. As the fiscal year progresses, the positive trends in GST return filings and collections reflect the success of policy interventions and the growing acceptance of the GST regime among taxpayers.