GST collections increase by 10% to reach ₹1.74 trillion in August

New Delhi: Central and state governments collected ₹1.74 trillion in Goods and Services Tax (GST) revenue in August, showing an annual growth of 10%, nearly in line with the estimated economic growth rate for this fiscal.

The finance ministry’s estimate for nominal economic growth in the current financial year is 10.5%.

Experts said GST revenue collection reflects both robust consumption of goods and services and administrative measures taken by the tax authorities to improve compliance. GST revenue collections are expected to further improve in the festive season, they said.

Data released by the ministry on Sunday showed that the central government collected ₹30,862 crores while states collected states ₹38,411 crores, before adjusting for refunds. The collection of integrated GST (IGST) on imports and inter-state sales was at ₹93,621 crores.

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Revenue from GST cess on automobiles, tobacco and aerated drinks stood at ₹12,068 crore in August.

Net GST receipts after adjusting for refunds stood at ₹1.5 trillion in August, up from ₹1.41 trillion in the same month a year ago.

So far this financial year, Centre and states collected ₹9.14 trillion in GST receipts, 10.1% more than the revenue collected in the same time a year ago.

IGST collections showed a 12.45% growth in August from the same month a year ago, indicating strong growth in imports. Data from commerce ministry showed that value of imports so far this year has grown annually. India imported goods worth US dollar 229.7 billion in the April to July period this year, an annual increase of 7.5%. August trade data is awaited.

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A 10% increase in GST revenue at the start of the festive season for the year indicates that consumption is robust and will only improve further in the coming festival months, said MS Mani, Partner at Deloitte India. This would give renewed confidence that the collection targets for the year would be achieved, said Mani.

Increased focus on investigations, audits

The increase in collection for the month is also attributable to the increased focus on GST investigations and audits, which typically increase compliance and resultant collections, said Mani.

Mint reported on 16 August that the Directorate General of GST Intelligence (DGGI) and its units across the country had issued over a thousand tax notices to businesses in the weeks leading up to 5 August, enquiring about alleged short payment of taxes and wrongful use of tax credits in 2017-18.

Delhi, Odisha, Haryana, Uttar Pradesh, Madhya Pradesh and Karnataka reported above 10% revenue growth in August, while North Eastern states Arunachal Pradesh, Nagaland, Meghalaya and Mizoram and some of the union territories showed a contraction in revenue collection.

Tax revenue collection trend is expected to be discussed at the GST Council’s meeting on 9 September when a ministerial group will share the status of discussions on tax rate rationalisation. The panel is looking into the impact of successive rounds of GST rate reductions on revenue collections.