The gross goods and services tax (GST) collections in October came in at Rs 1.72 trillion, up 13% on year. This was second highest monthly mop-up since the July 2017 launch of indirect tax that militates against cascading of taxes, data released by the finance ministry showed on Wednesday.
The year-on-year growth in GST collections in October was also the highest in 10 months.
The October gross GST mop-up was the second highest ever recorded since the inception of the indirect taxation regime in 2017.
October collections largely reflect the GST-liable transactions in September.
Cumulatively, the gross GST mop-up in the first seven months of the current fiscal year stood at Rs 11.65 trillion, 11.4% higher than the corresponding period of last year. The average monthly GST collections so far in FY24 stands at Rs 1.66 trillion.
Besides buoyancy in economic activity, mainly on the services front, elevated inflation also contributed to the robust GST mop-up during the year. Also, with the advent of the festive season, the collections are expected to rise even further in the near term.
Of the total collections, Central GST (CGST) and State GST (SGST) mop-up in October–post settlement from Integrated GST (IGST) collections–stood at Rs 72,934 crore and Rs 74,785 crore, respectively.
The total CGST collections in April-October stands at Rs 4.87 trillion, accounting for 60% of the Budget estimate of Rs 81.16 trillion. And during the same period in FY23, cumulative CGST collections accounted for 50.6% of the actual collections. This clearly indicates the actual CGST collections in FY24 may exceed the Budget estimate (BE) by a considerable margin.
Collections from Cess in October was at Rs 12,456 crore – taking total cess collections in the first seven months to Rs 82,957 crore, comprising 57.2% of BE. In April-October FY23 too, total cess collections accounted for 57% of actual mop-up.
MS Mani, Partner, Deloitte India, said, “the remarkable growth in GST collections over the past few months is not only on account of the underlying strong economic factors, but also due to the efforts of the tax authorities in deploying tools to compare data sets to determine short payment and evasion.”
Buoyancy in GST collections coupled with sharp growth seen in direct tax mop-up would help the Centre meet its fiscal deficit target of Rs 17.87 trillion, or 5.9% of the GDP, in the current fiscal year particularly when the Centre is likely to incur more-than-Budgeted expenditure.
“With the increased (GST) collection, the government can now consider rate rationalization as the next task,” said Saurabh Agarwal, Tax Partner, EY.