The highest-ever GST collection in April indicates a favourable trend signaling growth in domestic demand and the subsequent growth in the Indian economy.
The highest-ever GST collection in April indicates a favourable trend signaling growth in domestic demand and the subsequent growth in the Indian economy. Experts indicate that this also shows that the collection indicates better business compliance and steady growth but global growth continues to be a headwind.
GST collection grew 12 per cent in April to Rs 1.87 lakh crore. This is the highest monthly mop-up since the rollout of the indirect tax regime. Out of the gross GST revenue collected in the month of April 2023, Rs 38,440 crore is CGST, Rs 47,412 crore is SGST, and Rs 89,158 crore is IGST (including Rs 34,972 crore collected on import of goods) and cess is Rs 12,025 crore, the finance ministry said.“The increased collections are likely an indicator of a stable growth in the Indian economy. Highest ever collections also appears to be a result of March being the last month of the financial year,” said Saurabh Agarwal, Tax Partner, EY LLP.
The revenues for April 2023 are 12 per cent higher than the GST revenues in the same month last year. The previous high collection was in April last year which equated to Rs 1.68 lakh crore. There is generally a surge in GST collections in April,added Rajani Sinha, Chief Economist, CareEdge and explained that GST collections have been upbeat staying above the Rs 1.4 lakh crore mark for the 14th month in a row”. Tanushree Roy, Director- Indirect Tax , Nangia Andersen India, pointed out that, “Record GST collections in April 2023 emphasize a favourable trend signaling growth in the Indian economy coupled with increased compliances by businesses. March 2023, being the end of the financial year, also contributed to the increased GST collections.”
“It will not be surprising if we touch Rs 2 lakh crore a month by the end of current fiscal. Apart from economic growth led by higher consumer demand, greater emphasis on technology including advanced data analytics is the key reason for this growth. It may be a right time for the GST council to reinitiate the discussions on GST rate rationalization,” said Pratik Jain, Partner, Price Waterhouse & Co LLP.
The performance can also be attributed to encouraging domestic demand conditions and improved compliance measures. “This comes on the back of the monthly GST collections crossing Rs 1.4 lakh crore continuously during FY23 and hence is a testimony to the good economic growth and the enhanced efforts aimed at improving compliances. Majority of large states have reported a 20 per cent plus growth over the same period last year, indicating a broad level growth across sectors and states,” said MS Mani, Partner, Deloitte India.
Going forward, experts opined, the easing of inflationary pressures may further support the overall domestic demand in the economy. Even so, as Rajani Sinha said, “We also remain cautious on external demand conditions as global growth slows.”
Source:financialexpress.com