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Goods and services tax (GST) revenue rose 11 per cent year-on-year in July to Rs 1.65 trillion, showed official data released on Tuesday.
Monthly GST collection crossed the Rs 1.6 trillion mark for the fifth time, indicating vigorous economic activity and strict anti-evasion measures employed by both central and state governments.
GST collection figures in FY24, so far, are in line with the government’s monthly mop-up estimate of Rs 1.60-1.65 trillion during the current fiscal year.
According to economists and experts, the central GST (CGST) collection would meet the target for FY24, if the momentum continues in the remaining eight months. The festival season will start in two-three months and this should increase consumer spending and thus ensure higher revenue mop-up.
“The GST collection needs to exceed Rs 1.65 trillion per month to meet the Rs 8.1 trillion central GST (CGST) revenue target for the current fiscal year. This seems realistic,” said Aditi Nayar, chief economist, ICRA.
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In FY24, the government looks to raise Rs 9.56 trillion from GST, about 11.9 per cent more than the FY23 Revised Estimate of Rs 8.54 trillion. CGST receipts in FY24 are budgeted at Rs 8.11 trillion, against Rs 7.24 trillion in the FY23 Revised Estimate. Revenues for the Centre and states in July 2023 after regular settlement are Rs 69,558 crore and Rs 70,811 crore, respectively.
Of total collection, central GST accounts for 29,773 crore, state GST Rs 37,623 crore, and integrated GST Rs 85,930 crore, including Rs 41,239 crore collected on import of goods. The cess collection for the month under review stood at Rs 11,779 crore, including the Rs 840 crore mop-up on import of goods, the finance ministry said while releasing the provisional data.
In July, revenue from domestic transactions (including import of services) was 15 per cent higher than the revenue from these sources in the same month last year, it added.
“There is a clear divergence between revenues on collections on account of domestic transactions (including imports of services) and that on account of imported goods, with the latter averaging at just 0.8 per cent YoY during April-July 2023, reflecting the compression in merchandise imports. This divergence is set to continue owing to the expectation of a contraction in merchandise imports in FY24,” Nayar pointed out.
Experts highlighted that better compliance and anti-evasion drive helped tax buoyancy.
“The progressive reduction in the e-invoicing turnover limits, accompanied by the increase in the number of state-wise GST audits, has led to all businesses becoming more GST compliant, leading to increasingly stable GST collection month after month,” said MS Mani, partner, Deloitte India.
State-wise collection
Punjab, Haryana, Delhi, Uttar Pradesh, Maharashtra, Karnataka, and Tamil Nadu reported double-digit GST revenue growth in July, the data showed.
Delhi in July reported 25 per cent YoY growth in GST collection, which stood at Rs 5,405 crore. It was followed by Uttar Pradesh, which reported a 24 per cent jump in GST revenue at Rs 8,802 crore.
Maharashtra reported an 18 per cent improvement in revenue collection to Rs 26,024 crore; Karnataka (Rs 11,505 crore) reported a 17 per cent jump.
Tamil Nadu reported Rs 10,022 crore in GST revenue in July, up 19 per cent. Gujarat showed 7 per cent growth in July.
Steady collections over the past few months reflect an increasing awareness across businesses that GST compliance is essential and any non-compliance will be noticed immediately, Mani added.
