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Gross Goods and Services Tax (GST) collections rose 16.6 per cent year-on-year to Rs 1,51,718 crore for October (for sales in September), the second highest level since the rollout of the indirect tax regime in July 2017, according to data released by the Finance Ministry on Tuesday.
Although domestic transactions recorded the second highest growth after April 2022, the share of collections from imports continued to fall to 25 per cent, from 28 per cent in September and 30 per cent in August.
A high inflation rate, an increase in retail prices of many consumption goods, the buoyant festive season demand, alongside actions taken to ensure compliance, have all contributed to the rise in GST collections. The pace of year-on-year growth in GST collections, however, moderated to 16.6 per cent in October from over 25 per cent each in the last three months.
The monthly GST revenues have crossed the Rs 1.4 lakh crore mark for the last eight months. The Finance Ministry said in its statement that September saw generation of 8.3 crore e-way bills (electronic bill for movement of goods across the country), which is significantly higher than 7.7 crore e-way bills generated in August.
“The revenue for October 2022 is second highest monthly collection, next only to the collection in April 2022, and it is for the second time the gross GST collection has crossed Rs 1.50 lakh crore mark. October also saw the second highest collection from domestic transactions, next only to April 2022. This is the ninth month and for eight months in a row now, that the monthly GST revenues have been more than the Rs 1.4 lakh crore mark,” it said.
GST collections in April, accounting for year-end sales in March, had stood at Rs 1,67,540 crore.
The persistently high rate of inflation, an increase in retail prices of many consumption goods, buoyant festive season demand, alongside actions taken to ensure compliance, have all contributed to the rise in GST collections.
Experts said GST revenues have picked up with the onset of the festive season. At least 12 states/ UTs recorded a higher than 20 per cent growth in GST collections in their regions, while seven states/ UTs recorded a decline in their GST collections.
“This month’s collections mark the second highest revenue collection ever, and can be attributed to increased spending on account of the festive season starting. With the festive season continuing, the GST collections can be expected to go up further. This coupled with the revamped focus of the government on tax collections can lead to further increase in collections in the coming months,” said Abhishek Jain, Partner Indirect Tax, KPMG in India.
“GST collections in October 2022 have exceeded by 16% compared to the collections in October 2021. It proves that GST has now settled, proper systems are in place and compliance level has increased substantially. October was also a month of festivals and holidays wherein the people have splurged on real estate, vehicles, holidays and other necessities,” said Parag Mehta, Partner, Indirect Tax, N.A. Shah Associates.
Experts said that despite the moderation in rate of growth, GST collections are expected to overshoot the budgetary targets set for this fiscal. Revenue growth is crucial for fiscal arithmetic this year as the government tackles additional spending needs on account of fertiliser, food and fuel subsidies.
“The dip in the YoY growth in GST collections in October 2022 was expected given the normalising base, and may continue in the next few months. We continue to expect the CGST collections to exceed the FY2023 BE by Rs 1.3-1.4 trillion… with the festive season in October 2022, the generation of GST e-way bills is expected to have remained high, which should bolster the GST collections in the month of November,” ICRA’s Chief Economist Aditi Nayar said.
Out of gross GST revenue of Rs 1,51,718 crore, CGST – the tax levied on intra-state supplies of goods and services by the Centre – is Rs 26,039 crore, and SGST – the tax levied on intra-state supplies of goods and services by the states – is Rs 33,396 crore, the ministry said.
IGST — tax levied on all inter-state supplies of goods and services — is Rs 81,778 crore (including Rs 37,297 crore collected on import of goods) and cess Rs 10,505 crore (including Rs 825 crore collected on import of goods), it said.
The government has settled Rs 37,626 crore to CGST and Rs 32,883 crore to SGST from IGST. The total revenue of Centre and the states in October after regular settlement is Rs 74,665 crore for CGST and Rs 77,279 crore for SGST, the ministry said.
