GST collection since its inception has shown buoyancy and remarkable growth: Experts
Sep 02, 2024
New Delhi [India], September 2 : After the GST collection for the August showed a month-on-month decline in growth terms, the economic experts pointed out that the decline on month-on-month growth basis is not an appropriate way of looking at the numbers in view of the buoyancy in both direct and indirect taxes.
The experts also noted that the GST collection since its inception has shown a remarkable growth. The Goods and Services Tax revenue collection for August 2024 stood at Rs 1,74,962 crore, marking a 10 per cent increase compared to Rs 1,59,069 crore collected in August 2023.
"The August figures may seem a monthly decrease in growth terms on sequential basis. But this would not be an appropriate way of looking at things in view of the buoyancy in both direct and indirect taxes, tax slab rationalisation during the seven-year period" said Manoranjan Sharma, Chief Economist, Informerics Ratings.
"In other words, when considered in a proper historical and comparative perspective, the GST collection has risen remarkably since its inception. It's difficult to record a consistently high growth rate on a constantly rising and much higher base. This base effect needs to be factored in for a comprehensive assessment of the evolving GST collection scenario in India," he added.
Goods and Services Tax (GST) collections in August, in gross terms, were at Rs 1.74 lakh crore, with a yearly jump of 10 per cent however, the GST collections in July were Rs 1.82 lakh crore. In May and June, the collections were at Rs 1.73 lakh crore and Rs 1.74 lakh crore, respectively.
Experts also pointed out that the decline in the GST revenue is because of the increase in the refunds.
"Despite a decline in net GST revenue due to increased refunds, the continued growth in gross GST collections indicate a robust economy. The government's commitment to reduce working capital costs for businesses facing inverted duty structure is demonstrated by the higher domestic GST refunds" said Saurabh Agarwal, Tax Partner, EY
He also highlighted that "By rationalizing rates, the government aims to address this issue over time. The positive growth in GST collections in Nagaland, Assam, Andaman & Nicobar, and Ladakh indicates holistic economic development across India".
According to the data, so far in 2024, the total GST collection has been 10.1 per cent higher at Rs 9.13 lakh crore, as against Rs 8.29 lakh crore mopped up in the corresponding period of 2023.
