New Delhi: Goods and Services Tax (GST) revenue growth rate slowed to 6.5 per cent in September at Rs 1.73 lakh crore as growth in collection from domestic transactions and imports slowed .
However, with the festival season ahead, collections are expected to improve in the coming months, tax experts said. According to government data released on Tuesday, the GST revenue in September last year was Rs 1.63 lakh crore, while in August 2024, the clearance was Rs 1.75 lakh crore.
Gross domestic revenue grew 5.9 per cent to about Rs 1.27 lakh crore. Revenue from import of goods rose 8 percent to Rs 45.39 billion. Refunds worth Rs 20,458 crore were issued during the month, an increase of 31 per cent over the year-ago period.
After adjusting for refunds, net GST revenue in September stood at Rs 1.53 lakh crore, up 3.9 per cent from the same period last year. GST collections during the April-September period of the current fiscal year grew by 9.5 per cent to over Rs 10.87 lakh crore.
Pratik Jain, partner at PwC India, said that while GST revenue so far this year (September 2024) has grown more than 9 per cent, the monthly growth is perhaps lower than expected.
“This may need a closer look by the GST Council, particularly in the wake of the rate rationalization exercise. However, with the festive seasons approaching, the collection for the coming months could be better,” Jain said.
MS Mani, partner at Deloitte India, said the GST revenue for the coming months will be watched closely as it is also an indicator of economic growth and can be correlated with GDP figures.
However, the significant increase in GST refunds, especially IGST refunds on exports, reflects efforts by tax authorities to expedite refunds and policymakers to simplify the refund process.
“The tepid single-digit growth in GST revenues in many big states is expected to correct itself in the coming months,” Mani added.
EY tax partner Saurabh Agarwal said the significant increase in GST refunds for exports suggests a substantial increase in India’s exports. Furthermore, the overall increase in GST refunds demonstrates the government’s commitment to timely release of funds to support working capital of exporters and industries facing an inverted tariff structure.
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