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₹1.4L crore-plus GST mop-up for 6th month
The total amount raked in from the Goods and Services Tax (GST) in August was ₹1.44 lakh crore, government data showed on Thursday, the sixth consecutive time when this number was above the ₹1.4 lakh crore mark, a threshold experts called the “new normal”.
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The total amount raked in from the Goods and Services Tax (GST) in August was ₹1.44 lakh crore, government data showed on Thursday, the sixth consecutive time when this number was above the ₹1.4 lakh crore mark, a threshold experts called the “new normal”.
The collection trend has held up despite global headwinds such as the war in Ukraine and a slowdown in China, suggesting business activity and consumption across India has remained strong – a sign of particular importance given the high inflation challenge at present.
Compared to a year-ago period, the August collection ( ₹1,43,612 crore) was 28.2% year higher, although sequentially, the number fell by 3.6% compared to July’s ₹1.48,995 crore collection.
Also read: GST collection in August was ₹1.43 lakh crore, 28% YoY increase
Experts said GST revenues seem to have now stabilised around ₹1.4 lakh crore and the July figure – the second-highest ever -- was because it reflected actual business transactions of June, the closing month of the first quarter.
According to the Union finance ministry’s data released on Thursday, barring Himachal Pradesh, Uttarakhand, Manipur, Tripura and Chhattisgarh, all states achieved a double-digit year-on-year growth. Maharashtra saw a 24% spike in GST revenues, Karnataka 29%, Tamil Nadu 19%, Uttar Pradesh 14%, and Haryana 21%. Revenue growth for Delhi was 21%, Punjab 17%, and West Bengal 25%.
MS Mani, partner at Deloitte India, said GST collections in the last six months reflect the “strength of the underlying economic factors” with a new normal of ₹1.4 lakh crore and revenues are expected to go up in coming months due to the onset of the festival season, which is a large consumption driver for all businesses.
“The state wise collections figures indicate that the increase in production and consumption across goods and services is spread across states and is not confined to a few industrial pockets. The GST collections data is reflective of economic growth across states and sectors,” he said.
Punjab finance minister Harpal Singh Cheema said in a tweet that the state has “registered a healthy growth in GST revenue” in August 2022. “The measures taken by @BhagwantMann Govt to plug leakages and augment revenue are clearly showing result,” he said.
In a statement, Union finance ministry said the sustained high collections displays “very high buoyancy” and “this 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 said.
According to the official data, in August revenues from import of goods was 57% higher and the revenues from domestic transaction (including import of services) are 19% higher than the revenues from these sources compared to the same month last year.
The gross GST revenue collected in the month of August 2022 was ₹1,43,612 crore, of which central GST (CGST) was ₹24,710 crore, state GST (SGST) ₹30,951 crore, integrated GST (IGST) is ₹77,782 crore, including ₹42,067 crore collected on import of goods, and cess is ₹10,168 crore, including ₹1,018 crore collected on imports, the finance ministry’s statement said.
“While the GST revenue collections remain above ₹1.4 lakh crores for six consecutive months, decline in cess collections by approximately 7% compared to last month indicate decreased demand of goods such as automobile, cigarettes and aerated beverages. Effectively, the robust GST collections can be said to be having very limited impact of inflation on India’s economy compared to world,” said Saurabh Agarwal, Tax Partner at consulting firm EY. Previous month, the cess collection was ₹10,920 crore (including ₹995 crore collected on import of goods).
Also read: GST revenue up by 23% in Punjab: Finance minister Cheema
Other data showed India’s manufacturing sector activity in August witnessed the second-strongest improvement in operating conditions in nine months, boosted by strengthening demand conditions and softening inflation concerns.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) was little changed from July’s reading of 56.4, posting 56.2 in August.
Production volumes were also supported by a pick-up in exports and upbeat projections for the year-ahead outlook. Firms were at their most optimistic in six years.
These figures come a day after India’s economy was shown to have grown at 13.5% in the quarter ending June 2022, much lower than the 16.2% forecast by the Reserve Bank of India’s Monetary Policy Committee (MPC).
Because economic activity was severely disrupted during the June 2020 and June 2021 quarters due to the first lockdown and the second wave of the pandemic, GDP levels in these two periods were below pre-pandemic levels (June 2019 quarter). When compared to the pre-pandemic level of quarter ending June 2019, the June 2022 GDP shows a growth of just 3.8%.
