GST collections rise to ₹1.72 lakh crore in October

The 13.4% revenue growth marks the sharpest year-on-year uptick since December 2022 and breaks a three-month streak of deceleration

November 01, 2023 03:08 pm | Updated November 02, 2023 11:49 am IST - NEW DELHI

An Indian consumer goods trader shows letters GST representing “Goods and Services Tax” (GST)at his shop in Hyderabad on August 3, 2016. Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising 13.4% to the second-highest monthly tally of ₹1.72 lakh crore.

An Indian consumer goods trader shows letters GST representing “Goods and Services Tax” (GST)at his shop in Hyderabad on August 3, 2016. Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising 13.4% to the second-highest monthly tally of ₹1.72 lakh crore. | Photo Credit: AFP

Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising at a 10-month high pace of 13.4% to hit the second highest monthly tally of ₹1.72 lakh crore.

October’s GST receipts were 5.7% over the kitty in September, when growth in the indirect tax had slowed to a 27-month low of 10.2%. The 13.4% revenue growth marks the sharpest year-on-year uptick since December 2022 and breaks a three-month streak of deceleration.

Domestic transactions and services imports yielded a 13% uptick in October’s revenues. The Finance Ministry did not disclose the revenue growth from goods imports. Back of the envelope calculations by The Hindu indicate that GST levies on imports of goods rose 13.9% in October, which is faster than the growth from domestic transactions and the highest uptick in at least 9 months. Revenues from goods imports have contracted in four of the last seven months, including September.

GST Compensation Cess collections, which include ₹1,294 crore levied on goods imports, hit a record high of ₹12,456 crore in October. The previous highest collection of the cess levy that will persist till at least March 2026 was ₹12,025 crore received in April.

The Ministry did not share the revenue growth trends among States and union territories that is usually part of its monthly GST revenue statement, in the communique issued on Wednesday.

Instead, State GST revenue trends for the first seven months of 2023-24 were shared, including the amounts States were credited from collections of the Integrated GST (IGST). Following such IGST settlements, State GST revenues were up 12% between April and October 2023, with just two States reporting negative growth — Manipur (-19%) and Himachal Pradesh (-2%).

“The average gross monthly GST collection in the FY 2023-24 now stands at ₹1.66 lakh crore and is 11% more than that in the same period in the previous financial year,” the Ministry said.

Deadline effect 

Experts believe October’s GST kitty, stemming largely from transactions that took place in September, got a fillip from some festive spending as well as compliance deadlines and steps to curb evasion.

“One of the reasons for this rise is the time barring period for financial year 2017-18. Moreover, the spate of notices and anti-evasion drive have led to substantial collections,” said Parag Mehta, partner, indirect tax at N.A. Shah Associates.

ICRA chief economist Aditi Nayar said the “higher than anticipated” collections would have got a leg-up from quarter-end adjustments as well as the overall momentum in the economy.

KPMG indirect tax head and partner Abhishek Jain also linked the significantly increased collection to settlement of disputes for 2017-18 as the normal period of limitation was ending on September 30. “A mid-year collection of such a high number is definitely worth a cheer and the ongoing festivities driven consumption could help this continue,” he reckoned.

Last month’s GST revenues included Central GST (CGST) of ₹30,062 crore, ₹38,171 crore of State GST, and ₹91,315 crore of IGST. “The government has settled ₹42,873 crore to CGST and ₹36,614 crore to SGST from IGST. The total revenue of Centre and the States in the month of October 2023 after regular settlement is ₹72,934 crore for CGST and ₹ 74,785 crore for SGST.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.