Gross Goods and Services Tax (GST) collections rose 16.6 per cent year-on-year to Rs 1,51,718 crore for October (for gross sales in September), the second highest stage for the reason that rollout of the oblique tax regime in July 2017, based on knowledge launched by the Finance Ministry on Tuesday.
Although home transactions recorded the second highest progress 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 excessive inflation price, a rise in retail costs of many consumption items, the buoyant festive season demand, alongside actions taken to make sure compliance, have all contributed to the rise in GST collections. The tempo of year-on-year progress in GST collections, nevertheless, moderated to 16.6 per cent in October from over 25 per cent every within the final three months.
The month-to-month GST revenues have crossed the Rs 1.4 lakh crore mark for the final eight months. The Finance Ministry mentioned in its assertion that September noticed era of 8.3 crore e-way payments (digital invoice for motion of products throughout the nation), which is considerably increased than 7.7 crore e-way payments 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 mentioned.
GST collections in April, accounting for year-end gross sales in March, had stood at Rs 1,67,540 crore.
ExplainedBehind the rise
The persistently excessive price of inflation, a rise in retail costs of many consumption items, buoyant festive season demand, alongside actions taken to make sure compliance, have all contributed to the rise in GST collections.
Experts mentioned GST revenues have picked up with the onset of the festive season. At least 12 states/ UTs recorded the next than 20 per cent progress in GST collections of their areas, whereas seven states/ UTs recorded a decline of 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,” mentioned 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,” mentioned Parag Mehta, Partner, Indirect Tax, N.A. Shah Associates.
Experts mentioned that regardless of the moderation in price of progress, GST collections are anticipated to overshoot the budgetary targets set for this fiscal. Revenue progress is essential for fiscal arithmetic this 12 months as the federal government tackles extra spending wants on account of fertiliser, meals and gas 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 mentioned.
Out of gross GST income of Rs 1,51,718 crore, CGST – the tax levied on intra-state provides of products and providers by the Centre – is Rs 26,039 crore, and SGST – the tax levied on intra-state provides of products and providers by the states – is Rs 33,396 crore, the ministry mentioned.
IGST — tax levied on all inter-state provides of products and providers — is Rs 81,778 crore (together with Rs 37,297 crore collected on import of products) and cess Rs 10,505 crore (together with Rs 825 crore collected on import of products), it mentioned.
The authorities has settled Rs 37,626 crore to CGST and Rs 32,883 crore to SGST from IGST. The complete income of Centre and the states in October after common settlement is Rs 74,665 crore for CGST and Rs 77,279 crore for SGST, the ministry mentioned.
