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The Gross Goods and Services Tax (GST) collections declined to a three-month low of Rs 1.64 lakh crore in December (for sales in November), data released by the Finance Ministry on Monday showed. Though year-on-year growth of 10.3 per cent was registered in December, the pace of growth in GST collections was also the slowest in three months.
Earlier, a pickup in consumption and economic activity along with settlement of disputes by businesses following notices issued by GST authorities were seen to have contributed to the sharp rise in GST revenue, which has now moderated despite early-November having marked the festival season. The impact of lower imports is likely to have contributed to the decline in GST revenues. GST collections had surged 15.1 per cent to Rs 1.67 lakh crore in November and 13.4 per cent in October at Rs 1.72 lakh crore, the second-highest level since the July 2017 rollout of the indirect tax regime.
With the latest print, GST revenue collections have averaged at Rs 1.66 lakh crore per month during April-December 2023, up 11.7 per cent from the monthly average of Rs 1.50 lakh crore seen during April-December 2022. “During the April-December 2023 period, gross GST collection witnessed a robust 12% y-o-y growth, reaching Rs 14.97 lakh crore, as against Rs 13.40 lakh crore collected in the same period of the previous year (April-December 2022),” the ministry said in its statement.
Seven states/union territories out of 38 states/UTs (including Centre’s jurisdiction) recorded single-digit growth in GST collections. There was a marked sequential slowdown in revenue collection in states such as Gujarat, which collected Rs 9,874 crore in December, up 7 per cent from Rs 9,238 crore in the year-ago period but lower than Rs 10,853 crore collected in November 2023.
Similarly, GST collections grew in single digit for Chhattisgarh (1 per cent) at Rs 2,613 crore, Punjab (8 per cent) at Rs 1,875 crore, Rajasthan (1 per cent) at Rs 3,828 crore, and Himachal Pradesh (5 per cent) at Rs 745 crore. Strife-torn Manipur posted a positive growth of 9 per cent to Rs 50 crore in GST revenue collections in December after being in the negative territory in the previous month. Maharashtra, which accounts for the largest share in GST revenue collections, too recorded a moderation in the year-on-year growth at 14 per cent in December as against 18 per cent in November. In absolute terms, however, the GST revenue collection in Maharashtra increased to Rs 26,814 crore in December from Rs 25,585 crore in November and Rs 23,598 crore in the year-ago period.
“While major states have continued their growth, deeper analysis is required for the lack of growth in GST collections in Rajasthan, Chhattisgarh and Jharkhand,” MS Mani, Partner, Deloitte India said.
Post-settlement SGST revenue, which accounts for SGST revenue and the share of SGST from the IGST for states/UTs, totalled at Rs 6.39 lakh crore during April-December, an increase of 12 per cent from the year-ago period.
Overall, the total GST collections stood at Rs 1,64,882 crore in December, out of which Central GST — the tax levied on intra-state supplies of goods and services by the Centre — was Rs 30,443 crore, State GST — the tax levied on intra-state supplies of goods and services by the states — was Rs 37,935 crore, Integrated GST — the tax levied on all inter-state supplies of goods and services — was Rs 84,255 crore (including Rs 41,534 crore collected on import of goods) and cess was Rs 12,249 crore (including Rs 1,079 crore collected on import of goods).
Revenues from domestic transactions (including import of services) were 13 per cent higher than revenues from these sources during the same month last year, the ministry said in its statement.
In December, the government settled Rs 40,057 crore to Central GST and Rs 33,652 crore to State GST from Integrated GST. As a result, the total revenue for the month post settlement was Rs 70,501 crore for the Centre and Rs 71,587 crore for State GST.
With many businesses opting for settlement of disputes through some payments following the recent spate of notices sent by the GST authorities for recovery of non-payment of tax or underpayment or of wrongful availment of input tax credit, some payments by businesses would have been added to the overall GST revenue collection. Abhishek Jain, Partner & National Head, Indirect Tax, KPMG said, “While the collection is slightly lower than those seen last month, the consistent mark of above Rs 1.6 lakh crore provides large fiscal confidence; this being despite the various global headwinds. Festive cheer and continued settlement of FY 17-18 and 18-19 dues would have contributed well to this continued growth.”
Vivek Jalan, Partner, Tax Connect Advisory, said, “…the efficiency of Government tax machinery is calculated by the tax buoyancy generated…considering an inflation of 5.5 per cent and GDP growth of 6.5 per cent, a growth in GST revenues by 12 per cent just around matches the real economic growth. It means that there is nil tax buoyancy as of now. With multiple years assessments and show cause notices getting time barred in the current FY, possibly the Ministries at Centre and states would be expecting that some buoyancy be generated by the tax administration.”
