Indian GST Collections Reach ₹1.68 Trillion in November Amidst Festive Boost: In November, Goods and Services Tax (GST) collections in India reached ₹1.68 trillion, a substantial figure buoyed by festive demand, although slightly lower than the October collection of ₹1.72 trillion.
This robust tax revenue is noteworthy, particularly as GST-related audits for the initial years of the indirect tax reform are actively underway. Monthly GST collections have consistently remained strong, with six out of the eight months up to November exceeding ₹1.6 trillion. The current monthly average stands at ₹1.66 trillion, slightly above policymakers’ initial estimate of ₹1.65 trillion.
According to a statement from the finance ministry, November’s GST revenue showed a remarkable 15% improvement compared to the same period last year, marking the fastest pace of growth since the tax’s inception in 2017. However, the cumulative growth from April to November, at 11.87%, aligns closely with the nominal 10.5% economic growth rate projected for the year.
GST remittances in November represent sales from October, and experts note that post-festive season, wholesale transactions tend to moderate towards the year-end. The majority of indirect tax collection occurs at the wholesale level, where margins are higher.
The finance ministry also highlighted a 20% increase in revenue from domestic transactions and import of services in November compared to the previous year. After inter-state sales tax settlements, the Centre collected ₹68,297 crore, while states collected ₹69,783 crore.
The strong GST revenue in November was expected, given that the issuance of e-way bills, crucial for shipping goods within and across states, surpassed the 100-million mark in October. Both GST revenue receipts and e-way bills are considered indicators of household consumption, a key driver of economic growth.
Amidst a cooling consumer price inflation trend, experts believe that this could offset the impact of high interest rates in the coming months, boosting consumption and lowering input costs for businesses. Household consumption in the September quarter of the current fiscal year rose by 3% to ₹23.7 trillion, according to data released by the statistics ministry.
Besides festive demand, experts attribute the healthy GST revenue receipts to the emphasis on compliance, focused recovery measures by authorities, and the revamp of the tax regime for the online gaming sector. Manish Mishra, Partner and Head of Practice, Indirect Tax, at law firm JSA Advocates & Solicitors, anticipates the buoyancy in tax collections to continue in the second half with a surge in GST notices, adjudication, and recovery processes underway.