September 1st 2024.
In August, the Gross Goods and Services Tax (GST) collections in New Delhi saw a significant increase of 10%, reaching approximately Rs 1.75 lakh crore. This growth can be attributed to the rise in domestic consumption, according to the latest data released by the government on Sunday. It was reported that the gross GST revenues from domestic transactions grew by 9.2%, reaching around Rs 1.25 lakh crore. Additionally, revenues from the import of goods also saw a considerable increase of 12.1%, totaling Rs 49,976 crore.
Comparing the figures to last year, the GST mop-up for August 2021 was Rs 1.82 lakh crore, whereas it was Rs 1.59 lakh crore in August 2020. This indicates a significant improvement in the current year's GST collections, and experts believe that it will only continue to improve in the upcoming festival months. M S Mani, Partner at Deloitte India, expressed confidence in achieving the collection targets for the year, thanks to the 10% increase in collections at the start of the festive season.
Mani also mentioned that there were some differences in the GST collection increases across major states, which would require further analysis. He added that the refunds worth Rs 24,460 crore were issued in August 2021, reflecting a 38% increase compared to the same period last year. After adjusting for refunds, the net GST revenue saw a growth of 6.5%, reaching Rs 1.5 lakh crore during August.
Saurabh Agarwal, Tax Partner at EY, stated that the continued growth in gross GST collections demonstrated a robust economy. He also mentioned the government's efforts to reduce working capital costs for businesses facing an inverted duty structure, as seen in the higher domestic GST refunds. Agarwal believes that by rationalizing rates, the government aims to address this issue over time.
Mani further commented on the ability of large states like Maharashtra, Karnataka, Uttar Pradesh, Madhya Pradesh, and Haryana to record double-digit increases in collections, indicating strong consumption in these states. He also acknowledged the tax authorities' efforts to improve compliance and crack down on tax evasion. On the other hand, Mani pointed out that the single-digit increase in states like Gujarat, Andhra Pradesh, and Tamil Nadu would require the attention of the respective tax authorities.
Abhishek Jain, Head and Partner of Indirect Tax at KPMG, stated that the GST collections seem to have stabilized around Rs 1.75 lakh crore and are expected to see a surge in the upcoming months with the start of the festive season. Overall, the increase in GST collections reflects a positive outlook for the economy and the government's efforts towards improving compliance and addressing issues like inverted duty structure.
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