GST collections rise 6.5% year-on-year to ₹1.73 lakh crore in September
The Goods and Services Tax (GST) revenue in the month of September grossed a little over ₹1.73 lakh crore, posting a 6.5% year-on-year.
The Goods and Services Tax (GST) revenue in the month of September grossed a little over ₹1.73 lakh crore, posting a 6.5% year-on-year increase despite a poor show by several major states such as Andhra Pradesh, Gujarat and Telangana, according to data released by Union finance ministry on Tuesday.
The net GST collection in September 2024 saw a 3.9% annualised growth at ₹1,52,782 crore on higher refunds, a trend that is seen from last month because of increased efficiency in returns processing. Total refunds in the month surged by 31% to ₹20,458 crore in September 2024. Refunds in the previous month also saw a 38% year-on-year jump to ₹24,460 crore.
Cumulatively, gross GST collection in the first half (H1) of current fiscal year saw 9.5% annualised growth to ₹10.87 lakh crore. After ₹1,27,549 crore refunds in H1 of FY25 (about 12.6% y-o-y jump), net revenue in the first six months of 2024-25 was ₹9,59,547 crore, a little over 9% growth on an annualised basis.
Experts are confident that collections will grow in the coming festive season from October. The GST Council must, however, review the trend to take necessary measures required to maintain an overall double-digit annualised growth rate, they said.
Deloitte India partner MS Mani expects monthly collections to grow in the coming festive months. “While the GST revenues for the month (September) may be a little underwhelming, considering the fact these collections relate to supplies in August,” he said, pointing that the festive season buying spree is expected to start from the Navratras.
Experts said the technology-driven timely refund is a positive development as it frees working capital of businesses to that extent, particularly for micro, small and medium enterprises (MSMEs). “GST collections stabilising at ₹1.7 lakh crore-plus needs to be viewed together with the significant increase in refunds during the current year, especially the IGST Export refunds which have increased by 24%,” he said. Cumulatively, Integrated GST (IGST) related to export refunds in H1 of FY25 saw a 24.2% annualised growth to ₹61,122 crore.
Pratik Jain, partner at PwC India, said the monthly growth is perhaps less than expected. “This may need a closer look by the GST council, particularly in the wake of the rate rationalization exercise,” he said. He also expected improved collection numbers in the coming months. “With the festive season coming, the collection for the next couple of months might be better,” he said.
“The tepid single-digit growth in GST revenues in many of the large states should, hopefully, be corrected in the coming months,” Mani added. According to data, Gujarat, which is a large manufacturing state, saw stagnation in revenue growth. The state that mopped up ₹10,129 crore in September 2023 could manage a little more than that at ₹10,153 crore.
The September 2024 collection in Andhra Pradesh fell by 4% to ₹3,506 crore as compared to ₹3,658 crore in September 2023. Uttar Pradesh saw a 3% revenue growth from ₹7,844 crore in September last year to ₹8,057 crore in the same month this year. Telangana managed only 1% annualised growth in September 2024 at ₹5,267 crore.
Haryana was, however a shining star with robust 24% y-o-y growth in September revenue at ₹9,957 crore. Delhi also managed an impressive double-digit of 20% at ₹5,838 crore. The largest business hub, which is Maharashtra, could, however, manage only 5% growth at ₹26,369 crore.
Saurabh Agarwal, tax partner at EY India, said, “The significant increase in GST refunds for exports suggests a substantial rise in exports from India. Additionally, the overall increase in GST refunds demonstrates the government’s commitment to timely release of funds to support working capital of exporters and industries facing inverted duty structure.”