GST records second-highest collection at Rs 1.87 lakh crore in October on festive sales, compliance measures

The rise in GST collections in October was mainly driven by an increase in domestic transactions, while the contribution from imports slowed. Gross domestic revenue of GST increased by 10.6 per cent in October as against 5.9 per cent in September, while gross imports GST revenue rose by 3.9 per cent in October, slower than 8 per cent in September.

On a net basis, domestic GST revenue grew by 8.7 per cent in October as against 4.5 per cent in September, while revenue from imports increased 5.4 per cent in October as against 1.7 per cent in the previous month.

“The improvement in the year-on-year (YoY) growth in gross GST collections to 8.9 per cent in October 2024 from the multi-year low of 6.5 per cent in the previous month is certainly encouraging. Nevertheless, the YoY growth was compressed on account of the low rise in collections on imports in the month. Additionally, the growth in compensation cess collections was marginal in October 2024, at just 0.8 per cent, which reflects the weakness in the purchases of the items on which this is levied,” Aditi Nayar, Chief Economist, ICRA said.

State-wise data for October showed that out of 38 states/union territories (including Centre’s jurisdiction), 14 states/UTs recorded higher growth in gross GST collections than the national average of 10.6 per cent growth rate. In absolute terms, Maharashtra was at the top with collection of Rs 31,030 crore (14 per cent growth), followed by Karnataka with collection of Rs 13,081 crore (9 per cent growth), Gujarat with collection of Rs 11,407 crore (17 per cent growth), Tamil Nadu with Rs 11,188 crore (4 per cent growth) and Haryana with Rs 10,045 crore collection (15 per cent growth).

North-eastern states registered a contraction in GST collections including Arunachal Pradesh (-33 per cent), Nagaland (-8 per cent) and Manipur (-5 per cent) along with Himachal Pradesh (-2 per cent) and Chhattisgarh (-1 per cent).

While experts said the pickup in collections, despite higher rate of refunds, indicates stabilisation, slower growth in some states might be a matter of concern. MS Mani, Partner, Deloitte India, said: “…the driver appears to be domestic supplies with collections from imports increasing by only 3.6 per cent. The sharp increase in refunds indicates the stabilisation of the refund process and reduction in rejections due to interpretative issues. While many large states have recorded an increase above 9 per cent, some of them and many of the smaller states have shown a below average increase, which would be an area of concern for those states.”

Saurabh Agarwal, Tax Partner, EY said the recent GST collections indicate a potential slowdown in consumer spending in India, which surged in the previous fiscal year. “The single-digit growth signals a cooling-off period. The collections made in this month on account of festive season, particularly the performance of the automobile sector, will be crucial in determining the short-term trend. While the festive season is expected to boost collections, the overall outlook for the near future remains cautious,” he said.

The Central GST (CGST) — the tax levied on intra-state supplies of goods and services by the Centre — collections stood at Rs 33,821 crore, State GST (SGST) — the tax levied on intra-state supplies of goods and services by the states — collections were Rs 41,864 crore, while Integrated GST (IGST) — the tax levied on all inter-state supplies of goods and services — collections stood at Rs 99,111 crore and cess at Rs 12,550 crore during the month.