GST mop-up fourth highest ever but red flags in laggard states

ByRajeev Jayaswal, New Delhi

Dec 02, 2024 04:53 AM IST

GST revenue in November hit ₹1.82 lakh crore, marking a 8.5% increase from last year, despite slow growth in key states and a GDP dip to 5.4%.

The Goods and Services Tax (GST) revenue in November grossed over ₹1.82 lakh crore, the fourth highest monthly collection ever that also crossed the ₹1.80 lakh crore mark for the fifth time in 88 months since July 2017, despite major states such as Andhra Pradesh, Rajasthan and Chhattisgarh showing a dip in growth.

1.82 lakh crore, the fourth highest monthly collection ever. (Ministery of Finance X)” title=”The goods and services tax (GST) revenue in November grossed over ₹1.82 lakh crore, the fourth highest monthly collection ever. (Ministery of Finance X)”>

The goods and services tax (GST) revenue in November grossed over ₹1.82 lakh crore, the fourth highest monthly collection ever. (Ministery of Finance X)

Gross GST revenue collection in November increased by 8.5% to ₹1,82,269 crore compared to ₹1,67,929 crore collected in the same month of the previous year, while the net collection after refunds saw an 11.1% jump at ₹1,63,010 crore as against ₹1,46,786 crore, due to strong domestic business activity as compared to external sector growth.

Also read: GST collection rises 9% on domestic demand

The net revenue in the month saw double-digit growth mainly because refunds contracted by 8.9% from ₹21,143 crore in November 2023 to ₹19,259 crore in November 2024, according to government data released on Sunday.

Experts expressed concern over poor collections in some of the key states, especially in the light of the second quarter (Q2 of FY25) gross domestic product (GDP) growth data published on Friday. India’s GDP growth slowed to a seven-quarter low at 5.4% in Q2 of the current financial year, mainly because of global headwinds.

“The slower single-digit growth in some large states like Haryana (2%), Punjab (3%), UP & MP (5%), Tamil Nadu (8%), Telangana (3%) as well the negative growth in Rajasthan (-1%), AP ( -10%), Chhattisgarh (-1%) would be an area of concern as these states have significant manufacturing presence and considerable economic impact,” Deloitte India partner MS Mani said.

Saurabh Agarwal, tax partner at consultancy firm EY, sounded caution. “Considering the recent GDP data for the September 2024 quarter, we anticipate a slowdown in tax collections over the next four months. The global geopolitical scenario and potential consumer spending cuts could further exacerbate short-term economic growth,” he said. “However, the uptick in collections from states like Jammu & Kashmir, Bihar, Sikkim, Mizoram, Tripura, Assam, and Odisha points towards positive economic momentum in these regions,” he added.

Experts bank on strong domestic consumption to close the current financial year with record overall GST collections. “The domestic GST revenue growth of 10% plus in [the first eight months of] FY25 seems to support the GDP data which indicates an increase in domestic consumption… The projected GDP growth of 7% in FY25 augurs well for GST collections in the remaining four months of the current fiscal year, considering the fact that the collections in the first 8 months of FY25 have exceeded those of FY25 by more than ₹1 lakh crore,” Mani said.

Also read: India’s GDP growth slows to 5.4% in Q2, below RBI estimate: Govt data

According to the latest GST data, cumulative revenues in the eight months of FY25 increased by 9.3% on an annualised basis to ₹14,56,711 crore, with strong domestic transactions of ₹11,04,817 crore (a 10.3% year-on-year jump). Collections of gross import revenue during this period showed only 6.3% y-o-y growth at ₹3,51,894 crore. Similarly, net collections in April-November 2024 saw a single-digit annualised growth of 9.2% at ₹12,90,616 crore because of low 3.2% growth in revenues through imports.

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GST revenue in November hit ₹1.82 lakh crore, marking a 8.5% increase from last year, despite slow growth in key states and a GDP dip to 5.4%.

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Copyright 2024 - All Rights Reserved - Janashakti.News

GST mop-up fourth highest ever but red flags in laggard states

GST revenue in November hit ₹1.82 lakh crore, marking a 8.5% increase from last year, despite slow growth in key states and a GDP dip to 5.4%.

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