GST collection in September touches ₹1.73 lakh crore, growth lowest in current fiscal
Ahead of the festival-induced consumption demand, gross collection from Goods and Services Tax (GST) rose to over ₹1.73 lakh crore in September as against ₹1.63 lakh crore in corresponding month of last year. Experts expect some revenue enhancement measures in the next GST Council meeting.
However, the growth is lowest in the current year. Also, overall number is lower than previous month. GST mop up in September is related with supply of goods and services in August.
Low tax buoyancy
Data made public by GST portal on Tuesday showed that while collection from domestic consumption grew by around 6 per cent, that from import recorded a growth of 8 per cent. Meanwhile, both refund from both domestic and export sector surged with a growth of over 24 per cent and 39 per cent respectively. This affected net collection which grew by around 4 per cent.
Experts are concerned over lower growth. Vivek Jalan – Partner with Tax Connect Advisory Services said: “With the GDP growth at around 6.5 per cent and inflation around 4.5 per cent, the real GDP Growth is around 11 per cent. The year-to-date GST growth at 9.1 per cent means the tax buoyancy of less than 1 which may concern the GST Council.”
“Three groups of Ministers are now working simultaneously on real estate, rate rationalization and insurance. With the tax buoyancy moving southwards, it is expected that the next GST Council meeting should see some far-sighted measures on revenue enhancement,” he said.
On wait and watch mode
MS Mani, Partner, Deloitte India, said while the GST revenues for the month may be a little underwhelming, these collections relate to supplies in August, which is typically the beginning of the festive season buying spree which translates into increased revenues. The GST revenues for the coming months of the festive season will be eagerly watched.
However 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. “The tepid single digit growth in GST revenues in many of the large states should, hopefully be corrected in the coming months,” he said.
Saurabh Agarwal, Tax Partner, EY India said the significant increase in GST refunds for exports suggests a substantial rise in exports from India. Additionally, the overall increase in GST refunds demonstrates the government’s commitment to timely releasing funds to support working capital of exporters and industries facing inverted duty structure. “While collections for this month haven’t shown significant increases, it is anticipated that next month’s collections should see a significant increase due to the upcoming festive season,” he concluded
All eyes are now on the meeting of the Group of Ministers on rate rationlisation. The meeting under the convenorship of Bihar’s Deputy Chief Minister Samrat Chaudhary is scheduled on 19th and 20th of this month. Besides discussing rates on over 100 items, the meeting is expected to deliberate on GST rate on insurance premia. GoM’s suggestion will be considered by GST Council, in its meeting next month.