The finance ministry reported the GST collection of May stood at Rs 1.73 lakh crore. It was less compared to Rs 2.10 lakh crore in April but is more than Rs 1.57 lakh crore in May, of the previous year.
The May collection has corresponded with the consumption of goods and services claimed in April. Experts regarded that with the May print, Rs 1.7 lakh crore which is the average collection is the new normal against Rs 1.67 lakh crore of FY24.
Rs 3.83-lakh crore is the gross GST collections in FY 25 till May. It shows an effective 11.3% Y-o-Y rise, driven by the robust rise in domestic transactions (up 14.2%) and marginal growth in imports (up 1.4%). Post accounting for refunds, the net GST revenue in the FY 25 till May is Rs 3.36-lakh crore, contemplating an increase of 11.6 per cent compared to the same period last year, as per the Finance Ministry.
Powerful economy
The updated figures are in line with the current Gross Domestic Product (GDP) estimates which show that a stringent economy does not appear to have been affected either via the season of election or the heatwave in the nation. It added that the strength that the GST collections show, without significant seasonal or event-based variations across recent months, suggests the maturity of the GST system.
Tax experts quoted that an increase in GST collections from Jammu & Kashmir, Manipur, Puducherry, and Arunachal Pradesh proposes increasing consumption in these developing regions, indicating broader economic progress. “Augmented GST in northern states such as Delhi, Uttar Pradesh, etc, might be due to election spending and a rise in purchases of fans, coolers, and ACs caused through the more temperatures corresponded to the earlier year. From the collection of last month, a decline can be due to year-end tax payments in May and stagnant auto sales.
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The first 2 months of the same financial have been election months and still, a rise of 14% in the domestic collections is the consequence of the time-restricting duration of providing the notices for FY 2019-20 and the resulting collections because of partial admittance of issues through the taxpayers. The other reason for increased collections is the recovery measure taken by some GST departments for recovery of 100 percent of demand amounts barring the set up of the GST Tribunal.
Concerning the subsequent months, renewed confidence will be there in proceeding with the next step of reforms in the forthcoming months, without influential situations about the revenue impact that these reforms can elicit.
Tax experts mentioned the combination of the summer heatwave and lower auto sales direct to flat or lower GST collections in June 2024 compared to April’s elevation. The collections may hit in the 4th quarter of this fiscal and subsequently, as the GST Tribunals are anticipated to be set up this year.
