While central GST collections were estimated to be 8.9% higher at Rs 30,862 crore in Aug (based on transactions in July), state GST was pegged at Rs 38,411 crore, 7.3% higher than a year ago.But integrated GST – levied on imports and inter-state sales – was up 12.5% to Rs 93,621 crore, driven by robust collections in GST on imports and pointed to strong increase in shipments from overseas.
“A 10% increase in collections at the start of the festive season indicates that consumption is robust and will only improve in the coming festival months. This will give renewed confidence that the collection targets for the year will be achieved. The increase in collections for the month is also attributable to the increased focus on GST investigations and audits, which typically increase compliance and resultant collections,” said M S Mani, a partner at consulting firm Deloitte.
Refunds were the big talking point as they soared 38% to just a little under Rs 25,000 crore, driven by domestic refunds. “While the growth over last year’s corresponding period in gross GST collection is 10%, the net collection has grown only by 6.5% due to higher refunds (both domestic and exports). This is a tad lower than what govt might have been expecting. The GST Council may want to look into this aspect in the upcoming meeting, particularly in the context of expected GST rates rationalisation,” added Pratik Jain, partner at PwC India.
The GST Council is due to meet on Sept 9 and is expected to begin deliberations on rate rationalisation although a decision at the meeting is unlikely. But the steady 10% increase so far this year is certainly going to weigh on the overall calculations as the Centre and the states want rationalisation to be a revenue neutral exercise. So far this year, the average monthly collections have been to the tune of Rs 1,82,809 crore.
Floods in some parts of the country may have had an impact on the overall numbers, although it is likely to show more in the next month’s data.
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