The numbers, reflecting the first full-month collection trend after the GST rate rationalisation, were broadly on expected lines, according to experts, with growth in consumption making up for part of the shortfall.
The government carried out a sweeping revamp of the GST regime with effect from September 22, moving to a two-slab structure of 5% and 18%, with a special rate of 40% for select goods like cigarettes and lower rates for precious metals.
Officials said the government will keep a close watch on collections for the next two-three months to gauge the trend and assess the consumption impact.
“We are on the right path as far as revenue mobilisation is concerned. The taxable value of all supplies under GST grew by 15% during September-October, compared to 8.6% in the same period last year,” a senior government official said on condition of anonymity, adding that long-term consumption will depend on several factors beyond tax rates.
Growth was better than anticipated, according to the official, as the numbers reflected the phasing out of the compensation cess, making year-on-year comparisons “unfair”.
Primary sectoral analysis by Department of Revenue, based on returns filed, showed strong growth in sectors where rate rationalisation was implemented-including fast-moving consumer goods, pharma, food products, small cars and automobiles, all of which grew in double digits, barring two-wheelers and textiles.
“The recent softening in GST revenue collections was largely anticipated, reflecting the direct, albeit short-term, impact of the recent rate rationalisation measures,” said Saurabh Agarwal, Tax Partner, EY India.
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