The Union and state governments collected gross Goods and Services Tax (GST) revenue of ₹1.76 trillion in December, the lowest in in three months, but showing an improvement of 7.3% from a year ago, official data showed.
After adjusting for tax refunds, GST revenue collection stood at ₹1.54 trillion, showing annual growth of 3.3%.
The gross GST receipts had touched a record high of ₹2.1 trillion in April 2024 on the back of strong financial year-end inventory clearing by companies in March but subsequently moderated. Revenue collection crossed ₹1.8 trillion mark only four times in the nine months up to December, including April.
Experts pointed out that the recent slowdown in revenue collection is typical after the holiday season. “It’s well in line with expectations as we have been witnessing slight decrease in consumer spending over the past few months,” said Saurabh Agarwal, tax partner, EY.
Data showed the authorities gave ₹22,490 crore of tax refunds in December, 45.3% more than the refunds issued in the year ago period, a factor that has contributed to the net tax collections being lower than the gross receipts.
So far this financial year, GST of ₹16.33 crore has been collected prior to refunds, showing a 9.1% annual jump. After refunds, GST revenue receipts in the first nine months of the fiscal stood at ₹14.4 trillion, showing an 8.6% annual growth.
Punjab and Haryana showed strong revenue collection growth in December with collection improving 22% and 28%, respectively. Maharashtra reported a 9% annual growth in December, the same as Delhi. Among other large state economies, Tamil Nadu reported an 11% revenue growth in December from the same time a year ago, while Karnataka reported a 7% growth.
Experts also said that the authorities are providing more GST refunds for exports, signifying an increase in the volume of goods and services India is exporting.
The Union government has a target of collecting ₹9.1 trillion as Central GST (CGST) this fiscal, expecting an 11% growth over the CGST revenue collected in FY24.
The moderation in GST collection in December comes at a time policy makers are concerned about signs of moderation in urban consumption demand. Data from the Federation of Automobile Dealers Association (Fada) showed that in November, two-wheelers, three-wheelers and tractors posted annual growth of 15.8%, 4.23%, and 29.88%, respectively, but passenger vehicles and commercial vehicles experienced year on year decline of 13.72% and 6%, respectively. GST collected in December represents the sales executed in November.
Abhishek Jain, indirect tax head and partner at KPMG, said GST collection will mirror an expected pick-up in economic growth rate in the December quarter. In the September quarter, economic growth unexpectedly moderated to 5.4% compared to 6.7% in the June quarter and 8.2% in the September quarter of FY24.
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