The gross Goods and Services Tax (GST) collections for September, reflecting transactions in August, stood at Rs 1.73 trillion, slightly lower than the mop-up of 1.74 trillion in the previous month, official data released on Tuesday showed.
The y-o-y growth recorded in September collections was 6.5%, the lowest in 39 months, denoting consumption activity has taken a beating. Typically gross collections rise in absolute terms in September from August, but FY25 marks the second year after FY20, when the collections fell sequentially.
In the first half of FY25, the gross collections growth averaged 9.5%, lower than 11.1% in H1 of FY24. The underwhelming collections so far indicate GST mop-up growth for the full year may not match 10.5-11%, which has been the expectation in the finance ministry.
An official had earlier told FE that growth in Central GST may in fact touch 11% this fiscal, higher than 10.5% pegged in the Budget, due to a higher than expected nominal GDP growth. But in H1 CGST mop-up has averaged 9.6%.
The Budget has projected nominal GDP to grow at 10.5%. In Q1FY25, the nominal GDP grew 9.7%.
Pratik Jain, partner, PwC India said: “While YTD GST revenues (September 2024) has 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 rate rationalisation exercise.”
MS Mani, partner, Deloitte India said that the GST revenues for the coming months of the festive season will be eagerly watched as they are also a proxy for the economic growth and can be correlated with the GDP numbers. “The significant increase in the GST refunds, especially IGST export refunds, depicts the efforts of the tax authorities in expediting refunds and the policy makers in simplifying the refund process,” he added.
Refunds in September stood at Rs 20,458 crore, up 31% on year; and in H1, it stood at Rs 1.28 trillion, 12.6% higher on year, official data showed.
Several large states, in terms of gross GST collections, recorded a sub-7% growth in September. These included Kerala, Tamil Nadu, Telangana, Andhra Pradesh, West Bengal and Chhatisgarh.