India’s net GST mopup growth slows to 3.9% in Sept, shows govt data | Economy & Policy News
Net goods and services tax (GST) collections in September grew at the slowest pace in the current financial year at 3.9 per cent, reaching Rs 1.5 trillion amid high refunds, according to provisional data released by the government on Tuesday.
The gross GST collection, which is the figure before adjusting refunds, grew 6.5 per cent in September to Rs 1.7 trillion. This marks the second consecutive month of single-digit growth in collections and the slowest increase seen in 39 months.
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Cumulatively, in the current financial year (April-September), growth in total gross GST collection fell to a single digit of 9.5 per cent from the 10.1 per cent growth registered until last month (April-August). To be sure, the September figures capture goods and services transactions related to August.
Average monthly gross GST collections have dropped to Rs 1.77 trillion in the second quarter (July-September), down from Rs 1.86 trillion in the first quarter (April-June) of FY25. However, September represents the seventh straight month with collections exceeding Rs 1.7 trillion.
Tax experts noted that with the festive season approaching, collections in the next couple of months might improve.
“While year-to-date GST revenues have still grown by over 9 per cent, the monthly growth is perhaps less than expected. This may require closer scrutiny by the GST Council, particularly in light of the rate rationalisation exercise. However, with the festive season coming, collections in the next couple of months might be better,” said Pratik Jain, partner at PwC India.
The increase in GST collection in September also saw wide variation among states. While states and UTs like Uttarakhand (14 per cent), Haryana (24 per cent), and Delhi (20 per cent) registered double-digit growth, major states like Uttar Pradesh (3 per cent), Gujarat (0 per cent), Maharashtra (5 per cent), Karnataka (8 per cent), Tamil Nadu (5 per cent), and Andhra Pradesh (-4 per cent) had either single-digit growth or contraction.
Abhishek Jain, indirect tax head & partner, KPMG, said it is encouraging to see a significant surge in the processing of GST refunds this month. “With the kick-off to festivities, the next few months are expected to witness a further surge,” he added.
Refunds worth Rs 20,458 crore were issued in September, an increase of 31 per cent over the same period last year. The refund issued was higher for exports (39.2 per cent) compared to domestic (24.3 per cent) sources, all of which affected the net receipts of September.
Experts believe that the significant 31 per cent year-on-year rise in GST refunds underscores the government’s focus on enhancing the ease of doing business, facilitating timely refunds, and reducing working capital pressures for businesses.
“The upcoming GST Council meeting in November will be pivotal in further rationalising the tax structure and addressing industry-specific concerns, particularly around trade facilitation. The government’s sustained efforts to ensure a stable revenue trajectory are commendable, contributing to long-term economic resilience and growth,” said Mahesh Jaising, partner and leader, indirect tax at Deloitte India.
First Published: Oct 01 2024 | 9:07 PM IST