New Delhi Goods and Services Tax (GST) collections totaled almost ₹1.65 lakh crore in December, a 10.3% year-on-year increase and the sixth highest in 77 months since the new tax regime was rolled out in July 2017, on the back of a consistent performance by the Indian economy, and better compliance.
In sequential terms, the revenue fell marginally by 1.8% from the November collection, the third highest ever, according to official data.
Gross revenue in the month of December 2023, which reflects business transactions in November, was ₹1,64,882 crore, crossing the ₹1.60 lakh crore-mark for seventh time in 2023-24, and the ninth time since 2017, on the back of a buoyant economy and robust domestic demand.
Experts said the healthy GST revenue is a weathervane of economic health and reflects the resilience of the Indian economy despite global headwinds. India’s GDP grew by 7.6% in the second quarter of 2023-24 and by 7.7% in the first half of the fiscal year. The Reserve Bank of India (RBI) upped its GDP growth forecast for FY24 to 7% in its December Monetary Policy Committee meeting from 6.5% projected in October.
While the collection is slightly lower than those seen last month, the consistent mark of above 1.6 lakh crore provides large fiscal confidence; this being despite the various global headwinds, KPMG partner and national head of indirect tax Abhishek Jain said.
Gross GST revenues in the first nine months of the current financial year (April-December 2023) crossed ₹14.97 lakh crore compared to ₹13.40 lakh crore collected in the same period of the previous year, a 12% year-on-year growth, according to the data released by Union finance ministry on Monday. Increased GST collections over the 9-month period is an indicator of a stable Indian economy, better tax administration, and increased consumption, said Saurabh Agarwal, tax partner at consultancy firm EY.
Commenting on the December collections, the finance ministry said: Notably, this marks the seventh month so far this year with collections exceeding ₹1.60 lakh crore. Experts say that ₹1.60 lakh crore monthly collection is now a new norm. The average monthly gross GST collection of ₹1.66 lakh crore in the first 9-month period this year represents a 12% increase compared to the ₹1.49 lakh crore average recorded in the corresponding period of FY23, the ministry said in a statement.
Out of the ₹1,64,882 crore gross GST revenue in December, the central GST (CGST) component was ₹30,443 crore, state GST (SGST) ₹37,935 crore, and integrated GST (IGST) ₹84,255 crore (including ₹41,534 crore collected on import of goods). The cess collection in the month was ₹12,249 crore. The GST regime levies compensation cess on luxury goods and sin products such as liquor, cigarettes, other tobacco products, aerated water, automobiles, and coal, which will end on March 31, 2026.
Although overall collections saw a significant jump, monthly revenue growth of some key states fell significantly – Rajasthan and Chhattisgarh managed mere 1% year-on-year growth in GST revenue to ₹3,828 crore, and ₹2,613 crore, respectively, in December. Similarly, Jharkhand saw only 4% annualized growth in the period at ₹2,362 crore. Other major states saw robust double-digit growth in December – Maharashtra (14%, ₹26,814 crore), Karnataka (17%, ₹11,759 crore), Tamil Nadu (19%, ₹9,888 crore), Uttar Pradesh (12%, ₹8,011 crore), and Haryana (22%, ₹8,130 crore). While major states have continued their growth, deeper analysis is required for the lack of growth in GST collections in Rajasthan, Chhattisgarh, and Jharkhand, said MS Mani, partner at Deloitte India.
With the continuing impressive growth exceeding the fiscal targets for FY24, it is expected that the interim budget/ vote on account expected on February 1 would set higher targets for FY25 as well as set the tone for the next generation of GST reforms, Mani added.
From the December revenue, the government settled ₹40,057 crore to CGST and ₹33,652 crore to SGST from IGST. The total revenue of the Centre and the states in the month of December 2023 after regular settlement is ₹70,501 crore for CGST and ₹71,587 crore for the SGST, the finance ministry’s statement said.
