GST collections in July rose over 10 per cent to reach a three-month high of Rs 1.82 lakh crore in July. Experts feel that the collection will rise further with the approach of festive season.
July number is related to goods consumed and serviced availed in June.
Data showed that the rise in domestic GST collection was around 9 per cent while that from imports was over 14 per cent. At the same time, domestic refund was down by over 34 per cent though rise in refund on export was little over 1 per cent, bringing total refund down by around 19 per cent. Because of this, the net collection of GST rose by over 14 per cent to around ₹1.66 lakh crore.
MS Mani, Partner at Deloitte India, said that rise in GST revenue from imports as compared to domestic collections is significant. “These collections are based on supply transactions during June, which is typically a slow offtake month before the onset of the festive season,” he said.
Abhishek Jain, National Head, Indirect Tax at KPMG in India, felt that a 10 percent plus growth in collections for this year vis-a-vis the last year aligns well with expectations and depicts signs of stability and maturity of GST implementation in India. “With festivities coming up in the next few months, the collections should witness a further increase,” he said.
State-wise collection
There was wide divergence in State-wise collections. According to Saurabh Agarwal, Tax Partner, EY India, the surge in tax collections from Nagaland, Manipur, Andaman & Nicobar, and Ladakh suggests heightened economic activity and consumption in developing regions. “A potential stagnancy or decline in collections during August (compared to July month) is anticipated due to the monsoon season’s impact on overall economic momentum,” he said.
Mani noted a wide divergence in growth of collections compared to the same month last year across States even among the large manufacturing and consuming States. “While States such as Maharashtra, Gujarat and Karnataka have shown a growth of 11-13 per cent, States like Tamil Nadu, Andhra Pradesh and UP are in the range of -7 per cent to 5 per cent. This divergence should be further evaluated based on sectoral data for these States,” he said.
Vivek Jalan, Partner with Tax Connect, said current growth rate of 10 per cent is almost aligned with the estimated budgeted growth of GST for FY 2024-25 of around 11 per cent. “What is important is that this growth in GST collections in July’24 came in the backdrop of a great year for GST collections growth. Hence this is true growth and not a result of a low base effect,” he said.