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Business News/ Economy / Centre, states collect 1.59 trillion in GST in August
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Centre, states collect ₹1.59 trillion in GST in August

Monthly GST collection was at ₹1.65 trillion in June, the same as the average monthly GST collection projected for this fiscal by policy makers.

In August 2022, the collection from Goods and Services Tax (GST) was ₹1,43,612 crore.Premium
In August 2022, the collection from Goods and Services Tax (GST) was 1,43,612 crore.

New Delhi: Central and state governments collected 1.59 trillion in Goods and Service Tax (GST) revenue in August, an increase of 11% year-on-year, but lower than the mop-up in June, data from finance ministry showed on Friday.

Monthly GST collection was at 1.65 trillion in June, the same as the average monthly GST collection projected for this fiscal by policy makers.

Compared to the receipts in July, GST revenue in August showed moderation in the tax collected by the Centre (CGST), states (SGST) and the revenue from imports and inter-state sales (IGST) but experts said the slight fluctuation in monthly tax figures do not suggest anything of concern about India’s consumption story.

Also Read: India’s Q1 GDP growth rises to one-year high of 7.8%; RBI to maintain FY24 projection

After settlement of taxes for inter-state sales, the Centre collected 65,909 crore, while states garnered 67,202 crore, the ministry said. Tax receipts usually see a spike in the first month of a quarter due to hectic economic activity in the previous, quarter-ending month, after which a slight moderation is seen in subsequent two months. This fiscal year, April had seen the highest ever GST revenue collection of 1.87 trillion, followed by the second highest in July.

The ministry said that revenue from import of goods was 3% higher year-on-year in August while revenues from domestic transactions (including import of services) was 14% higher.

Also Read: Global growth is set to slow, but India continues to be a bright spot, says Moody's

Aditi Nayar, chief economist and head of Reserach and Outreach at rating agency ICRA Ltd. said that the headline GST number is marginally lower than the agency’s forecast, dampened by imports, which is a matter of commodity prices. The overall collection so far this year remains robust, Nayar said.

Major state economies Uttar Pradesh, Maharashtra, Gujarat and Tamil Nadu reported double digit annual growth rate in GST collections. While Maharashtra reported a strong 23% jump in GST revenue to 23,282 crores in August, Karnataka saw a 16% jump in revenue to 11,116 crores and Gujarat a 12% jump to 9,765 crores, official data showed.

Experts also said that while GST collections remain robust, there are some factors that could dampen revenue receipts in the future.

“ The steady increase in revenue not only reflects a resurgence in consumer demand but also underscores the government's ongoing efforts to boost capital expenditure, which, in turn, is encouraging private investment. Nonetheless, it's worth noting that future growth prospects may be tempered by factors such as below par monsoon conditions, elevated inflation, and higher interest rates," said Saurabh Agarwal, Tax Partner at EY.

Inflation measured by consumer price index (CPI) was at 7.44% in July, way above the Central Bank’s tolerance limit of 6% with rural and urban food price inflation remaining in double digits. This had prompted the finance ministry caution in its latest monthly economic review that while economic growth continues to be driven by domestic consumption and investment demand, greater vigilance by government and the RBI is warranted on inflationary pressures which may remain elevated in coming months due to global uncertainty and domestic disruptions.

 

Prime Minister Narendra Modi led NDA government, which will seek a return to power at next year's national polls, has already imposed export restrictions on rice and wheat and resorted to administrative steps to cool local prices.

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Published: 01 Sep 2023, 01:49 PM IST
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