Gross goods and service tax (GST) collections came in at Rs 1.44 trillion in August (July transactions), up 28% on year but 3.6% lower than in July. The collections, being above Rs 1.4 trillion for six months in a row, reflected improved compliance, high inflation and sustained revival of consumption.
August GST mop-up allayed fears of any sharp loss of economic momentum post the first quarter of the financial year. On Wednesday, official data said the June quarter growth in gross domestic product was 13.5% on a very supportive base, lower than 16.2% forecast by the Reserve Bank of India. Manufacturing activity remained subdued in Q1FY23 with just 4.8% growth on year on a low base suggesting that it was hit by supply issues.
The finance ministry said in a statement: “The growth in GST revenue till August 2022 over the same period last year is 33%, continuing to display very high buoyancy. This is a clear impact of various measures taken by the (GST) Council in the past to ensure better compliance.”
However, analysts note that while the economic recovery continues to gather pace, it also faces multiple risks, primarily due to external factors. On the positive side, recent RBI surveys indicated improving consumer sentiments which augurs well for consumption.
During August, revenues from import of goods are 57% higher and the revenues from the domestic transactions (including import of services) are 19% higher than the revenues from these sources during the same month last year.
In July 2022, 76 million e-way bills were generated, marginally higher than 74 million in June 2022 and 19% higher than 64 million in June 2021.
The government has settled Rs 29,524 crore to Central GST and Rs 25,119 crore to states GST from IGST. The total revenue of Centre and the states in August 2022 after the regular settlement was Rs 54,234 crore for CGST and Rs 56,070 crore for the SGST.
“These collections certainly reflect the strength of the underlying economic factors as they have established a new normal of Rs 1.4 trillion. With the onset of the festival season, which is typically a large consumption driver for all businesses, the GST collections in the coming months would also be expected to be robust,” MS Mani, partner at Deloitte India.