GST collections rose 10% to almost £17.5 bn on a gross basis, but higher refunds slowed down the net expansion of the kitty, latest data showed. While central GST collections were estimated to be 8.9% higher at £3.08 bn in Aug (based on transactions in July), state GST was pegged at £3.84 bn, 7.3% higher than a year ago. But integrated GST - levied on imports and inter-state sales - was up 12.5% to £9.36 bn, 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 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 £2.5 bn, 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.
