Growth in India’s gross Goods and Services Tax (GST) collections slowed to a three-year low in June, with revenues rising about 7.74% to about ₹1.74 lakh crore from ₹1,61,497 crore collected in the year-earlier period, according to numbers shared informally by officials.
The Finance Ministry, which generally releases monthly GST revenue collections on the first of every subsequent month, including details about trends on State-wise collections and revenues collected from domestic transactions and imports, had not officially issued any statement on June’s indirect tax receipts till the time of going to press on Monday.
Social media posts
The Ministry did put out a series of social media posts to mark the seventh anniversary of the GST regime, with July 1 marked as GST Day, to assert that it had brought “happiness for every home” with lower rates on household goods, a level playing field for all taxpayers, and lower compliance burden on small businesses.
The growth in June’s gross GST revenues, pertaining to transactions undertaken in the economy during the month of May, was the slowest pace since June 2021, when revenues had risen just 2% amid the second wave of the COVID-19 pandemic.
The rise in last month’s gross GST revenues also trails the 12.4% and 10% growth recorded in April and May 2024, respectively, and is a mere 0.73% above May’s gross tally of ₹1,72,739 crore. For the first quarter, gross GST revenues were about ₹5,57,006 crore, roughly 10.2% higher than the ₹5.05 lakh crore collected in the year-earlier period.
In recent months, the Ministry had begun sharing details about net GST collections as well, after factoring in refunds.
In April, net GST collections had risen 15.5% to ₹1.92 lakh crore out of the record gross revenues of over ₹2.1 lakh crore. However, in May, net GST revenue growth eased to 6.9% with a tally of ₹1.44 lakh crore. In the absence of an official statement, net collections last month are not known.
Economists, speaking on condition of anonymity, expressed surprise at the absence of an official statement on the GST revenues for last month, and reckoned this would hamper analysis on activity trends in the economy.
While data for Central and State GST collections was not available, an official source said that about ₹39,600 crore had been settled to the central GST account from Integrated GST (IGST) collections, while States had been given ₹33,548 crore from the IGST pool.
In June 2023, IGST collections stood at ₹80,292 crore, including ₹39,035 crore collected on import of goods. From that kitty, the government had settled ₹36,224 crore to CGST and ₹30,269 crore to SGST. Compared to that settlement, June 2024 has seen a 9.3% rise in CGST and 10.8% in SGST apportioned from the IGST collections.
Tax experts noted the slowdown in June’s revenue growth relative to recent months. “However, overall GST collections have shown an encouraging trend over the last few months,” said Pratik Jain, partner at PwC India. “Industry hopes that the trend will enable the GST Council to restart the rationalisation of GST’s rate structure, as indicated in the Council’s last meeting on June 22,” he added.
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