GST Mop-Up Slips 40-Month Low In September

India gross Goods and Services Tax collection growth in September reached a 40-month low of 6.5%, resulting in revenues of Rs 1.73 lakh crore, while the net collection, after adjusting refunds, grew merely 3.9%, slowest so far in the current fiscal year.

The September mop-up is about 1% less than what it collected in the preceding month, while on a net basis, it's 1.5% higher than August receipts of Rs 1.53 lakh crore, according to the government's provisional data released on Tuesday.

In the current fiscal, the government has so far mopped up a gross GST revenue of Rs 10.87 lakh crore, which is 9.5% higher as against the April-September period of last year. On a net basis, the collection is Rs 9.6 lakh crore.

In September, refunds amounting to Rs 20,458 crore were issued, representing a 31% increase compared to the same month last year.

According to the experts, the GST receipts are expected to surge in the upcoming festival season following the demand and consumption.

“While year-to-date GST revenues (Sep 2024) have still grown by over 9%, the monthly growth is perhaps less than expected. This may need a closer look by the GST Council, particularly in the wake of the rate rationalisation exercise. However, with festive seasons coming, the collection for the next couple of months might be better, said Pratik Jain, Partner, PwC India.

The GST Council has nominated a ministerial panel to suggest changes in the GST tax rates and slabs and examine the possibility of moving to a three-slab structure from the existing 4-slab structure.

Abhishek Jain, Indirect Tax Head & Partner, KPMG, says the GST collections seem to have stabilised around 1.75 lakh crore now. With the kick-off to festivities, the next few months are expected to witness a further surge. Also, it is encouraging to see a significant surge in processing of GST refunds in this month.”

Notably, September saw a 5.9% increase in domestic revenue, making it Rs 1.27 lakh crore. Revenue from the import of goods also grew by 8%, touching Rs 45,390 crore.

The Union budget for 2024-25 projects GST collections to rise by 11.6% to Rs 10.6 lakh crore for the year ending March 2025, compared to the revised estimate of Rs 9.6 lakh crore for the previous year.

"The significant increase in GST refunds for exports suggests a substantial rise in exports from India. Additionally, the overall increase in GST refunds demonstrates the government's commitment to timely releasing funds to support the working capital of exporters and industries facing inverted duty structures, said Saurabh Agarwal, Tax Partner, EY.

State-wise, the growth in collections in Ladakh, Puducherry, and Andaman indicates comprehensive development across the country.

The gross collections from tax on cross-state transactions, or IGST, were Rs 90,594 crore in September, followed by SGST of Rs 39,283 crore and CGST of Rs 31,422 crore.

Revenue from cess, which is not shared with states, was Rs 11,941.

Among large states, Haryana saw a jump of 24% in GST collections from Rs 8,009 crore in September last year to Rs 9,957 this time.

Maharashtra, India's top state in terms of size of GDP, garnered revenue of Rs 26,369 crore, up 5%. West Bengal, Tamil Nadu, Bihar, and Uttar Pradesh also witnessed a rise in GST collections in the 3-7% range. Gujarat's mop-up was flat at Rs 10,153 crore.