GST revenue growth in India has slowed to the 27-month low of 10.2% in September from nearly 10.8% in the past two months. While a 2.3% improvement in collections is there in the revenues of August to touch Rs 1,62,712 cr.
In September 2022, revenues generated from domestic transactions, including service imports, exceeded tax collections from these sources by 14%. The Finance Ministry has announced that this marks the fourth occasion in the fiscal year 2023-24 when the gross GST collection has surpassed the Rs 1.60 lakh crore milestone.
Although GST inflows from goods imports rebounded with a 3% growth in August following two months of contraction, they experienced a slight decline in September. While the Finance Ministry did not determine the actual magnitude of the decrease in its official statement, rough estimates indicate that GST revenues from goods imports plunged by 0.11% compared to the same period last September.
Slowest GST Revenue Occurs in 27 Months
The most recent instance of slower GST revenue growth occurred back in June 2021 when collections increased by a modest 2%, coinciding with the second wave of the COVID-19 pandemic. During that period, revenue calculations were based on domestic transactions spanning from June 5 to July 5, owing to the relief measures implemented. These measures included waivers and reduced interest rates on delayed filings, specifically targeting businesses with an aggregate turnover of up to Rs 5 crore.
The revenues of GST in the former month laid on the transactions operated in August comprise Central GST (CGST) collections of Rs 29,818 crore, State GST (SGST) of Rs 37,657 crore, and Integrated GST (IGST) of Rs 83,623 crore that comprises of Rs 881 cr collected on the import of the goods.
Rs 33,736 crore to CGST and ₹27,578 crore to SGST from IGST have been settled by the government. As per the finance ministry, the centre and the state’s total revenue in September 2023 post regular settlement is Rs 63,555 cr for the CGST and ₹65,235 crore for the SGST.
Bihar Reports a Reduction While Manipur Records High GST Revenue Collection
From the contraction in the month of August, the conflicted state Manipur’s revenue recovered attaining the record with the highest growth among the States in the month of September surging from 47%. The revenues of GST in the state of Telangana surged to 33%, followed by Jammu and Kashmir (32%), Arunachal Pradesh (27%), Tamil Nadu (21%), and Karnataka (20%).
A total of 17 states experienced revenue growth below the national average of 14%, while 12 states reported growth rates of 14% or higher. States that witnessed slower growth included Gujarat, Uttar Pradesh, Kerala, Haryana, Odisha, and Jharkhand. Delhi, Meghalaya, and Assam recorded the weakest growth at 2%, followed by West Bengal at 3%.
Bihar was the lone state to register a decrease in GST collections for September, with revenues declining by 5%. In contrast, the Union Territories of Lakshadweep and Andaman and Nicobar Islands saw substantial declines in revenues, with year-on-year drops of 45% and 30%, respectively. On a different note, the Union territory of Ladakh witnessed a remarkable 81% surge in revenues.
Resolving Some Pending GST Tax Liabilities
Some tax experts speculate that a portion of the September revenue increase might have been driven by businesses resolving outstanding tax liabilities that have been pending since the introduction of the GST regime in 2017-18.
Given that the standard limitation period for the financial year 2017-18 concluded on September 30, it’s possible that the uptick in collections is connected to businesses addressing GST payment issues from that specific period. Additionally, there is the expectation that revenue from indirect taxes may see further growth as the festive season approaches.
