In the first quarter of 2021-22, States recorded higher growth in GST collection, due to the "base effect", anti-evasion measures, and higher growth.
However, some states have still not recovered the lost revenue in the first quarter of 2021-22 compared to the first quarter of 2019-20.
Kerala's GST collection grew at 106% in the first quarter of 2021-22. However, it is still short of Rs. 563 crore compared to the first quarter of 2019-20.
Going by the latest data, the near-term outlook on GST collection seems optimistic. However, a third wave of the COVID-19's can throw the GST collection momentum out of gear.

1. Introduction
The revenue from Goods and Services Tax (GST) constitutes nearly one-third of own tax revenue of states. Thus, its recovery holds the key to the revival of the state finances and their economies. GST being a destination-based consumption tax is a good indicator of the performance of the state economy. Thus, the recovery of GST also indicates the recovery of the state domestic product of a state.
The GST collection of states disappeared as the COVID-19 pandemic hit the states' economy and the subsequent prolonged shutting down of the economy starting from last week of March 2020. As economic activities came to a grinding halt in the first quarter of the financial year 2020-21, states' revenue collection dried up. Fortunately, economic activity was in full swing in April, May, and June of this fiscal year (2021-22). How did the GST collection of states recover in the first quarter of this current fiscal year 2021-22 (Q1:FY22)? Did it recover the lost revenue in the first quarter of last fiscal year, 2020-21 (Q1:FY21)? Importantly, what holds for the future of GST collection? What implications will it have on the GST compensation? This piece intends to address those questions.
2. Trend in GST collection
The data for GST collection of each state is taken from the GST website (www.gst.gov.in). GST revenue of a state is defined as the sum of SGST (State Goods and services tax) and IGST (Integrated Goods and Services Tax) settlement to the state. GST devolution from the Government of India in accordance with the finance commission is not included as 'State revenue' in this analysis. The trend in GST revenue collection for 18 major States is reported in Table 1.

Table 1:  First quarter (Q1) GST revenue and its growth – Various years