GST collections touched a record of Rs 1.40 lakh crore in January on rapid economic recovery, Finance Minister Nirmala Sitharaman said on Tuesday.

In her 2022-23 Budget speech, the minister said there has been a remarkable progress made in the Goods and Services Tax (GST) regime, but still a few challenges remain.

"Gross GST collection in January at record Rs 1,40,986 crores; this has been possible due to rapid economic recovery," she said while presenting the Budget in the Lok Sabha.

January is the seventh straight month when the GST collection has crossed the Rs 1 lakh crore mark.

The second highest monthly GST collection was in April 2021 at Rs 1,39,708 crore while in December it was more than Rs 1.29 lakh crore.

After a 6.6 per cent contraction in 2020-21, the economy made a smart recovery to an estimated 9.2 per cent growth in the current fiscal ending March 2022, on the back of vaccination programme and lifting of pandemic-related restrictions.

The recovery has strengthened as the new variant has been less devastating and the previous one, leading to few restrictions on economic and business activity.