India’s gross revenues from the Goods and Services Tax (GST) were ₹1,43,612 crore in August, 28% higher than a year ago. Revenues from import of goods soared 57% during the month while domestic transactions and import of services yielded 19% higher taxes than in August 2021.
This is the sixth successive month when GST revenues have been over the ₹1.4 lakh crore mark, the Finance Ministry said, stressing that GST collections have risen 33% till August this year, compared to the same period of 2021-22, and are “continuing to display very high buoyancy”.
On a sequential basis, however, August’s GST kitty, based on transactions carried out in July, was 3.6% lower than July’s collection of ₹1,48,995 crore and marks a three-month low. As per the Ministry, 7.6 crore e-way bills were generated in July, “marginally higher” than 7.4 crore in June and 19% higher than the 6.4 crore in July 2021.
The Ministry said the sustained uptick in GST collections is “a clear impact of various measures taken by the (GST) Council in the past to ensure better compliance”. Better reporting coupled with economic recovery has been having positive impact on the GST revenues on a consistent basis, it added.
The gross GST revenue collected in August includes ₹24,710 crore of Central GST (CGST), ₹30,951 crore collected as State GST (SGST), and Integrated GST (IGST) of ₹77,782 crore, which comprises ₹42,067 crore collected on import of goods. GST Compensation Cess collections were ₹10,168 crore and included 1,018 crore collected on import of goods.
“While absolute GST collections displayed a mild sequential dip in August, the impressive 28% year-on-year growth reflects the revival in consumption, improved compliance as well as elevated inflation,” said Investment Information and Credit Rating Agency of India (ICRA) chief economist Aditi Nayar.
“The consistently high GST collections indicate upward economic trajectory despite fluctuating COVID cases, and are, to some extent, attributable to inflation and better compliance being ensured by the Government,” said Abhishek Jain, partner (indirect tax) at KPMG in India.
While overall domestic GST revenues rose 19%, there were wide variations in collections across States, with 13 States seeing a higher growth in revenues, three States reporting a flat or negative growth, and 14 States, including the erstwhile State of Jammu and Kashmir, seeing a slower uptick than 19%.
Mizoram, Goa report highest growth among States
August GST revenues grew 19% in Tamil Nadu, 21% in Haryana and Delhi, 22% in Andhra Pradesh, 24% in Maharashtra, 25% in West Bengal, 26% in Kerala, and 29% in Karnataka. Mizoram and Goa reported the highest growth in revenues at 78% and 32%, respectively.
Among other States, however, the growth rates were less enthusing — with Telangana, Rajasthan, and Assam clocking a 10% rise, Uttar Pradesh (14%), and Gujarat and Madhya Pradesh (15%). Odisha and Punjab revenues grew 17%, while GST inflows dropped 22% year-on-year in Manipur and were flat in Uttarakhand and Tripura.
“The government has settled ₹29,524 crore to CGST and ₹25,119 crore to SGST from IGST. The total revenue of the Centre and the States in the month of August 2022 after regular settlement is ₹54,234 crore for CGST and ₹56,070 crore for the SGST,” the Ministry said.
While GST collections are likely to grow over 20% in September as well, Ms. Nayar said these year-on-year growth rates will ‘temper down’ to 12-15% in the October to December quarter on a normalising base, trending close to the nominal GDP expansion.
“We continue to foresee a considerable upside in the CGST collections relative to the 2022-23 Budget estimates, more than offsetting the expected loss in excise collections,” Ms. Nayar said.