September’s Goods and Services Tax (GST) collections showed a 6.5% increase compared to last year. However, experts are optimistic about the upcoming months, citing the ongoing festive season and the government’s efforts to maintain stable revenue.
The Finance Ministry reported that September’s GST collections were Rs 1.73 lakh crore, compared to Rs 1.62 lakh crore in September 2023.
“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.
Mani noted that GST revenues in the upcoming festive season will be closely monitored as an indicator of economic growth and its correlation with GDP figures. He also mentioned the government’s initiatives to expedite refunds and simplify the refund process.
Also Read: After fall season in September, all eyes on festive lightsMahesh Jaising, Partner and Leader of Indirect Tax at Deloitte India, described a 6.5% year-on-year growth in GST collections as healthy. He said, “The continued momentum in both import and domestic collections reaffirms the strength of the underlying economy.” Jaising highlighted the importance of the upcoming GST Council meeting in November for tax structure rationalization and addressing industry concerns.Saurabh Agarwal, Tax Partner at EY India, mentioned that growth in regions like Ladakh, Puducherry, and the Andaman and Nicobar Islands is contributing to 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,” he added.
Overall, CGST, SGST, IGST, and cess all increased year-on-year in September. So far in 2024, total GST collections have been 9.5% higher at Rs 10.9 lakh crore compared to Rs 9.9 lakh crore in the same period of 2023.
ET also reported that economists believe the recent softness in the economy is likely temporary, with expectations for a favorable monsoon and the upcoming festive season to provide a boost. “Consumption is projected to rise in the second half of the current financial year. The consumer goods sector is particularly well-positioned for strong performance,” stated Madan Sabnavis, chief economist at Bank of Baroda. He noted that increased spending in rural areas is expected to drive this growth. “We are on track to achieve a growth rate exceeding 7%.” Furthermore, Paras Jasrai, senior economic analyst at India Ratings and Research, indicated that economic performance in FY25 has been robust thus far, with demand drivers becoming more diverse, as evidenced by strong growth in both consumption and investment.
(With ANI inputs)