NEW DELHI: GST collections rose nearly 11% to Rs 1,65,105 crore in July, driven largely by domestic demand as imports floundered. Collections in July, for transactions in June, were the third highest monthly mop-up after last April (Rs 1,87,035 crore) and April 2022 (Rs 1,67,540 crore) and marked the fifth time when the kitty was more than Rs 1.6 lakh crore.
There is a clear divergence between revenues on account of domestic transactions (including imports of services) and that on account of imported goods, with the latter averaging at just 0.8% yearon-year during April-July 2023, reflecting the compression in merchandise imports.
This divergence is set to continue owing to the expectation of a contraction in merchandise imports in 2023-24,” said Aditi Nayar, chief economist at ratings agency ICRA. She, however, said that it was realistic to expect collections reaching the annual target of Rs 8.1 lakh crore, for which the monthly mop-up needs to exceed Rs 1,65,000 crore
Experts attributed the rising trend to steps taken by the government, both at the Centre and in states. “Consistent growth in GST is a classic case for government investing in core tech infrastructure (with a long-term vision) and refining the system to boost revenues over time. What is heartening is that India is the only country on scale with reducing administrative costs and increasing tax revenues,” said Divakar Vijayasarathy, founder & CEO, DVS Advisors, a tax and business advisory firm.
Domestic transactions saw robust growth with central GST rising 15.6% in July to Rs 29,773 crore and state GST increasing 147% to Rs 37,623 crore. Integrated GST, which is levied on inter-state sales and imports, grew at around 8%, pulled down by 0.4% decline in the levy on shipments coming from abroad. Similarly, the cess on imported and luxury goods fell 15.6% to Rs 840 crore, the lowest since February.
There is a clear divergence between revenues on account of domestic transactions (including imports of services) and that on account of imported goods, with the latter averaging at just 0.8% yearon-year during April-July 2023, reflecting the compression in merchandise imports.
This divergence is set to continue owing to the expectation of a contraction in merchandise imports in 2023-24,” said Aditi Nayar, chief economist at ratings agency ICRA. She, however, said that it was realistic to expect collections reaching the annual target of Rs 8.1 lakh crore, for which the monthly mop-up needs to exceed Rs 1,65,000 crore
Experts attributed the rising trend to steps taken by the government, both at the Centre and in states. “Consistent growth in GST is a classic case for government investing in core tech infrastructure (with a long-term vision) and refining the system to boost revenues over time. What is heartening is that India is the only country on scale with reducing administrative costs and increasing tax revenues,” said Divakar Vijayasarathy, founder & CEO, DVS Advisors, a tax and business advisory firm.
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