India’s goods and services collection for August topped Rs 1.43 lakh crore, growing at 28 per cent year-on-year. This is the sixth consecutive month when the GST revenues have crossed Rs 1.40 lakh crore,
Elevated inflation could be a reason for rising GST collections along with improved consumption, said experts.
"While the absolute GST collections displayed a mild sequential dip in August 2022, the YoY growth rate remained at an impressive 28 per cent reflecting the revival in consumption, improved compliance as well as elevated inflation. Looking ahead, the YoY growth in GST collections is likely to remain well above 20 per cent in September 2022, before tempering down to 12-15 per cent in Q3 FY2023, on a normalising base, trending close to the nominal GDP expansion. We continue to foresee a considerable upside in the CGST collections relative to the FY2023 BE, more than offsetting the expected loss in excise collections,” said Aditi Nayar, chief economist at ICRA.
The State Bank of India, in a recent research, had said the gap between the actual GST revenues versus inflation-adjusted revenues started increasing since May 2020 with a significant difference between the two since mid-2021.
“The growth in GST revenue till August 2022 over the same period last year is 33 per cent, continuing to display very high buoyancy. This is a clear impact of various measures taken by the Council in the past to ensure better compliance. Better reporting coupled with economic recovery has been having positive impact on the GST revenues on a consistent basis. During the month of July 2022, 7.6 crore e-way bills were generated, which was marginally higher than 7.4 crore in June 2022 and 19 per cent higher than 6.4 crore in July 2,” the finance ministry said after the data release.
According to Deloitte India with the onset of festive season, which is typically a large consumption driver for all businesses, the GST collections in the coming months would also be expected to be robust.