Goods and services tax (GST) collections in December accelerated to cross the ₹1 trillion mark for the second consecutive month, up 8.9% year-on-year. This should normally suggest green shoots. However, changed GST Council norms for claiming input credit may have contributed to the increase in collections in December.
The changed norms mandate companies to match their purchase invoices with those uploaded by their vendors. Input credit claims have been limited to 20%, which is now further reduced to 10%, where details are not uploaded by suppliers. As a result, a larger number of companies have to upload GST returns with corresponding invoices into the system. This led to an increase in GST returns filed in December for sales in November, from 7.2 million a year ago to 8.1 million now. This means about 1 million filers have been added in 2019.