Gross Goods and Services Tax (GST) collections rose to Rs 1,51,718 crore for October (for sales in September), the second highest level since the roll-out of the indirect tax regime in July 2017, data released by the Finance Ministry on Tuesday showed. Even though domestic transactions recorded the second highest growth after April 2022, the share of collections from imports fell to 25 per cent from 28 per cent in September and 30 per cent in August. High inflation rate, increase in retail prices of many consumption goods, the festive season demand, and actions taken to ensure compliance supported 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 last three months. What is the government's view Monthly GST revenues have been above the Rs 1.4 lakh crore mark for the last eight months in a row. The Finance Ministry in its statement on Tuesday said September saw generation of 8.3 crore e-way bills, which is significantly higher than the 7.7 crore e-way bills generated in August 2022. “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," the statement said. GST collections in April, accounting for year-end sales in March, had stood at Rs 1,67,540 crore. What do the improved revenues signify? 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. Abhishek Jain, partner, Indirect Tax, KPMG in India, said, “This month’s collections mark the second highest revenue collection ever, and can be attributed to increased spending on account of the festive season. With the festive season continuing , the GST collections can further be expected to go up. This coupled with the revamped focus of the government on tax collections can lead to further increase in collections in the coming months.” Parag Mehta, partner, Indirect Tax, NA Shah Associates, said, “GST collections in October 2022 have exceeded by 16 per cent the collections in October 2021. It proves the fact 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.” Experts said 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 fertilizer, 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 2022,” ICRA’s Chief Economist Aditi Nayar said.
