The Goods and Services Tax (GST) collections in October saw a 16.6% year-on-year growth at around ₹1.52 lakh crore, the second highest monthly revenue crossing the ₹1.50 lakh crore mark for the second time and the ₹1.40 lakh crore figure for the eighth consecutive month on increased festive sales and better tax administration.
The gross GST revenue of ₹1,51,718 crore in October this year is the second highest since the new indirect tax regime was launched in July 2017. The record monthly collection of ₹1,67,540 crore was achieved in April this year, according to the official data. Monthly GST revenues have been robust since January this year establishing the new benchmark of ₹1.40 lakh crore, barring the month of February ( ₹1,33,026 crore).
Commenting on the October 2022 revenue, a finance ministry statement said: “This is the ninth month [of the current calendar year] and for eight months in a row now, that the monthly GST revenues have been more than the ₹1.4 lakh crore mark. During the month of September 2022, 8.3 crore e-way bills were generated, which was significantly higher than 7.7 crore e-way bills generated in August 2022.” October collections reflect actual business activities undertaken in September.
As GST is consumption-based tax, experts said high collections reflect robustness of the Indian economy, even as some states showed a negative monthly revenue growth on an annualised basis. “The fact that the collections have moved up to a new level in excess of ₹1.5 lakh crore is impressive and is on account of the festive primary and secondary demand together with the various measures taken to improve compliance,” said MS Mani, partner at Deloitte India.
{{/usCountry}}As GST is consumption-based tax, experts said high collections reflect robustness of the Indian economy, even as some states showed a negative monthly revenue growth on an annualised basis. “The fact that the collections have moved up to a new level in excess of ₹1.5 lakh crore is impressive and is on account of the festive primary and secondary demand together with the various measures taken to improve compliance,” said MS Mani, partner at Deloitte India.
{{/usCountry}}While most of the major states registered a double-digit growth in GST collections for October 2022 compared to the same month last year, revenues in Jammu & Kashmir, Assam, Chhattisgarh and Bihar have sown some dip.
Collections saw significant jump in major manufacturing states – Haryana saw a 37% growth in October revenues at ₹7,662 crore. Maharashtra (19%, ₹23,037 crore), Karnataka (33%, ₹10,996 crore), Tamil Nadu (25%, ₹9,540 crore) and Gujarat (11%, ₹9,469 crore), according to official data.
GST collections in J&K, however, dipped 34% from ₹648 crore in October 2021 to ₹425 crore in October 2022. The collections fell 1% in Bihar (from ₹1,351 crore in October 2021 to ₹1,344 crore in October 2022), 13% in Assam (from ₹1,425 crore in October 2021 to ₹1,244 crore in October 2022) and 3% in Chhattisgarh (from ₹2,392 crore in October 2021 to ₹2,328 crore in 2022). The annualised fall in October revenue was sharper 23% in cases of Manipur and Mizoram.
Saurabh Agarwal, tax partner at consulting firm EY said on sequential basis there is a consistency in revenue growth showing that “consumption pattern” remains the same. He said “increased administration” by both, the Centre and states have also played the role in collections.
Experts said these are minor states from the GST perspective with low on manufacturing and very moderate on trading. “Most of the major states have reported an impressive increase in collections indicating that it is a broad-based phenomenon across the country,” Mani added.
According to the Union finance ministry, GST cess in October has been ₹10,505 crore (including ₹825 crore collected on import of goods), which is second highest till date. Experts say this signifies increased sales of luxury goods such as automobiles during the festive month. GST compensation cess is levies on luxury goods and sin products such as liquor, cigarettes, other tobacco products, aerated water, automobiles, and coal.
“This month’s collections mark the second highest revenue collection ever, and can be attributed to increased spending on account of festive season starting. With the festive season continuing, the GST collections can further be expected to go up. This coupled with revamped focus of government on tax collections can lead to further increase in collections in the coming months,” said Abhishek Jain, partner-Indirect Tax at KPMG in India.