After the Goods and Services tax collections for September showed a yearly jump of 6.5 per cent, the experts in this domain have expressed optimism for the collections in the upcoming months, citing the continued festive season and the government's focus to ensure a stable revenue trajectory.
The economic experts say that the current month's GST collections may seem underwhelming but they only reflect supplies of August, which is marked by the beginning of festive season purchases.
The finance ministry released figures of GST on 1 October, in which the collections in September, in gross terms, stood at Rs 1.73 lakh crore. In September 2023, the total collection was to the tune of Rs 1.62 lakh crore.
"While the GST revenues for the month may be a little underwhelming, considering the fact these collections relate to supplies in August, which is typically the beginning of the festive season buying spree, resulting in increased revenues," said MS Mani, Partner at Deloitte India.
He added that the GST revenues for the coming months of the festive season will be eagerly watched as they are also a proxy for economic growth and can be correlated with the GDP numbers.
Mani further added, However, the significant increase in the GST refunds, especially IGST export refunds, depicts the efforts of the tax authorities in expediting refunds and the policymakers in simplifying the refund process. The tepid single digit growth in GST revenues in many of the large states should, hopefully, be corrected in the coming months."
On the other hand, Mahesh Jaising, Partner and Leader of Indirect Tax at Deloitte India, highlighted the resilience of the tax framework. According to him, a 6.5 per cent year-on-year growth in GST collections is healthy.
Jaising added that the ongoing policy reforms and compliance measures and a 31 per cent year-on-year increase in GST refunds are evidence of the government's commitment to enhancing ease of doing business.
"The continued momentum in both import and domestic collections reaffirms the strength of the underlying economy," he added.
However, he also says that 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 in ensuring a stable revenue trajectory are commendable, contributing to long-term economic resilience and growth," he added.
Saurabh Agarwal, Tax Partner, EY India stated reacting to the GST collection data that the continued growth in regions such as Ladakh, Puducherry, and the Andaman and Nicobar Islands is helping the collections.
"While collections for this month haven't shown significant increases, it is anticipated that next month's collections should see a significant increase due to the upcoming festive season," Agarwal said.
The economic experts say that the upcoming festive season will be pivotal in driving higher GST revenues further. They are also hopeful that the next GST Council meeting in November will address industry-specific concerns.
CGST, SGST, IGST and cess all increased year-on-year in September, the official data shows, which was released yesterday.
So far in 2024, the total GST collection has been 9.5 per cent higher at Rs 10.9 lakh crore, as against Rs 9.9 lakh crore mopped up in the corresponding period of 2023.(ANI)
