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Business Standard
21 hours ago
- Business
- Business Standard
Net GST revenue grows 20.4% to Rs 1.7 trn on import taxes: Govt data
Receipts of goods and services tax (GST) after adjusting for refund grew 20.4 per cent year-on-year to ₹1.73 trillion in May on the back of a sharp increase of 72.9 per cent in Customs-related revenue and a decline of 4 per cent in refund outgo, according to the data released by the finance ministry. Sequentially, there has been a nearly 17 per cent drop over April's net GST collection, which stood at ₹2.09 trillion. Gross GST collection in May rose 16.4 per cent to ₹2.01 trillion, with the yield from domestic sources rising 13.7 per cent and import-related revenue going up a sharper 25.2 per cent. Gross GST collection had reached an all-time high of ₹2.4 trillion in April, registering a growth rate of 12.6 per cent. Abhishek Jain, head, indirect tax, and partner, KPMG, said it was encouraging to see gross GST collection again crossing ₹2 trillion in May. 'While last month's (April) spike was expected with year-end reconciliations, consistency this month, along with 16 plus per cent year-on-year growth, points to strong underlying momentum and a recovery that's clearly taking hold,' he added. The generation of eway bills in April had increased to the second-highest level of 119 million, which is reflected in the May GST data, with a year-on-year growth rate of more than 20 per cent for the second consecutive month. 'This (eway bill) robust momentum in goods movement signals sound business activities and is also indicative of stronger GST collection in May 2025,' the Monthly Economic Review, released by the finance ministry last week, had said. M S Mani, partner, Deloitte India, said compared to the FY25 average gross GST collection of ₹1.84 trillion, the ₹2.01 trillion for May, which relates to transactions in the first month of FY26, would provide significant fiscal headroom for the government. 'These figures are also in line with the recent GDP (gross domestic product) growth estimates, which indicate a robust consumption pattern across months,' he added. The state-wise data shows smaller states/Union Territories like Manipur (102 per cent), Lakshadweep (445 per cent), and Chandigarh (53 per cent) posted sharp growth in May on an annual basis, while large consumption and industrial states such as Maharashtra (17 per cent), Tamil Nadu (25 per cent), and Karnataka (20 per cent) also reported robust gains. Mizoram and Uttarakhand rang in declines of 26 per cent and 13 per cent, respectively. '...The average growth across the country doesn't appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors, which require a deeper data based analysis,' Mani added.
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Business Standard
a day ago
- Business
- Business Standard
Net GST revenue grows 20.4% to Rs 1.73 trillion on higher import taxes
Receipts of goods and services tax (GST) after adjusting for refund grew 20.4 per cent year-on-year to ₹1.73 trillion in May on the back of a sharp increase of 72.9 per cent in Customs-related revenue and a decline of 4 per cent in refund outgo, according to the data released by the finance ministry. Sequentially, there has been a nearly 17 per cent drop over April's net GST collection, which stood at ₹2.09 trillion. Gross GST collection in May rose 16.4 per cent to ₹2.01 trillion, with the yield from domestic sources rising 13.7 per cent and import-related revenue going up a sharper 25.2 per cent. Gross GST collection had reached an all-time high of ₹2.4 trillion in April, registering a growth rate of 12.6 per cent. Abhishek Jain, head, indirect tax, and partner, KPMG, said it was encouraging to see gross GST collection again crossing ₹2 trillion in May. 'While last month's (April) spike was expected with year-end reconciliations, consistency this month, along with 16 plus per cent year-on-year growth, points to strong underlying momentum and a recovery that's clearly taking hold,' he added. The generation of eway bills in April had increased to the second-highest level of 119 million, which is reflected in the May GST data, with a year-on-year growth rate of more than 20 per cent for the second consecutive month. 'This (eway bill) robust momentum in goods movement signals sound business activities and is also indicative of stronger GST collection in May 2025,' the Monthly Economic Review, released by the finance ministry last week, had said. M S Mani, partner, Deloitte India, said compared to the FY25 average gross GST collection of ₹1.84 trillion, the ₹2.01 trillion for May, which relates to transactions in the first month of FY26, would provide significant fiscal headroom for the government. 'These figures are also in line with the recent GDP (gross domestic product) growth estimates, which indicate a robust consumption pattern across months,' he added. Mani said a 25 per cent rise in import revenue suggests accelerated imports despite tariff hikes. However, Saurabh Agarwal, partner, EY, said the 21 per cent sequential dip in gross domestic GST collection suggested a shift in consumer spending. 'While last month's (April) higher collection likely included year-end business-to-business sales being pushed due to the meeting of targets, this large decrease points to some bit of change in consumer spending possibly due to global uncertainties,' Agarwal said. The state-wise data shows smaller states/Union Territories like Manipur (102 per cent), Lakshadweep (445 per cent), and Chandigarh (53 per cent) posted sharp growth in May on an annual basis, while large consumption and industrial states such as Maharashtra (17 per cent), Tamil Nadu (25 per cent), and Karnataka (20 per cent) also reported robust gains. Mizoram and Uttarakhand rang in declines of 26 per cent and 13 per cent, respectively. '...The average growth across the country doesn't appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors, which require a deeper data based analysis,' Mani added.
Fibre2Fashion
4 days ago
- Business
- Fibre2Fashion
Risk of barriers after US tariff pause expires key weakness for India
The potential risk of trade barriers, after the 90-day pause on the 26-per cent tariff on Indian exports to the United States expires on July 9, is a key external vulnerability for the Indian economy, and the outcome of a pause in the US-China reciprocal tariffs is also important, the country's finance ministry noted in its Monthly Economic Review for April. 'A successful [US-India] trade deal could mitigate these risks and boost exports, even as private investment remains cautious in the face of global uncertainty,' officials from the department of economic affairs (DEA) wrote in the review. The risk of trade barriers, after the 90-day pause on the 26-per cent US tariff on Indian exports expires in July, is a key external vulnerability for India, and the outcome of a pause in the US-China reciprocal tariffs is also important, the finance ministry noted. India will benefit from supply chain adjustments, diverse FDI sources and greater collaboration with global investors, it said. 'In the future, India will benefit from supply chain adjustments, diverse foreign direct investment sources, and greater collaboration with global investors seeking resilience and growth, supported by its existing trade connections,' they wrote. The external sector performance remains resilient, with fiscal 2025-26 commencing on a favourable note, they noted. The country's foreign exchange reserves remain adequate, providing an import cover of approximately eleven months. The trade-related and other global uncertainties faced by India are faced by several other nations but most of them lack the advantages that India has: macroeconomic stability, fiscal policy that is focused on quality of expenditure and prudence delivering lower cost of capital to the country, a benign inflation and monetary policy backdrop and financial and corporate sectors with strong balance sheets, they added. Fibre2Fashion News Desk (DS)
India Gazette
5 days ago
- Business
- India Gazette
India offers 'deep cuts' on tariffs as talks with US proceed
New Delhi aims, however, to maintain high tariffs on key agricultural products, the outlet has said India has proposed deep cuts in import tariffs on various goods, in an effort to reach a preliminary trade agreement with the US, the Financial Times reported on Wednesday. However, the country reportedly aims to maintain high tariffs on sensitive agricultural products, such as grains and dairy items. India is seeking to secure a deal before July 9, when the US has threatened to impose a 26% reciprocal tariff on all Indian goods. Sources familiar with the negotiations told the FT that India has shown willingness to cut tariffs on less sensitive farm products such as almonds, which currently face tariffs of up to 120%. It could also consider reducing tariffs on imported oil and gas, which range from 2.5 to 3%, the report said. The FT's sources declined to provide details on the range of US goods which New Delhi offered to "substantially" cut tariffs on, as the negotiations were at an "early stage." Indian trade officials have hinted, however, that any concessions would be similar to those offered in recent trade agreements, such as the one they have with the UK, in which India agreed to reduce tariffs on items such as alcoholic spirits, cars - including electric vehicles - car parts, and engineering goods. On Tuesday, India said that a successful trade agreement with the US could "flip current headwinds into tailwinds," according to a report by the Finance Ministry's Monthly Economic Review. This can "open up new market access and energize exports," the report added. The US introduced an additional tariff on Indian products, effective April 2, but it was suspended for a 90-day period, and is set to expire on July 9. Meanwhile, the standard 10% US tariff on Indian goods remains in places. US President Donald Trump has called India the "tariff king." In February, New Delhi announced a reduction in customs duties on items including luxury cars and solar cells, according to reports, in a move seen as aimed at addressing US trade concerns. India's federal budget for 2025 proposed reducing the peak import tariff from 150% to 70% and average tariffs from 13% to below 11%. India is also willing to buy US defense equipment and liquefied natural gas, government officials said. However, despite this, the US has advised companies such as Apple to avoid expanding manufacturing in India.
The Hindu
5 days ago
- Business
- The Hindu
Increased outward FDI by Indian companies ‘warrants attention': Finance Ministry
Even as Indian companies turn 'cautious' on investing within the country, and the global economic scenario remains uncertain, the increased outward foreign direct investment by Indian companies 'warrants attention', the Ministry of Finance has noted in a new report. The Hindu had previously reported how the Reserve Bank of India's data showed that, in 2024-25, Indian companies invested a total of $29.2 billion in other countries, 75% higher than the previous year, which was a major contributor towards India's net foreign direct investment (FDI) figure falling 96% to just $0.4 billion. 'That Indian overseas direct investment increased nearly by $12.5 billion during the year FY25, even as uncertainty reigned in the world, warrants attention, especially given their cautious attitude towards domestic investment,' the Department of Economic Affairs of the Ministry of Finance noted in its Monthly Economic Review (MER) released on Tuesday (May 27, 2025). Data from the private sector database Centre for Monitoring Economy (CMIE) shows that the Indian private sector is indeed turning more cautious about its plans, as exhibited by a rising ratio of projects cancelled versus new ones announced. Analysis by The Hindu of the CMIE data shows that the ratio of dropped projects to new project announcements by the Indian private sector — where a higher ratio indicates higher caution — has risen steadily to 36% in 2024-25 from 30.8% in 2023-24, and 21.8% in 2022-23. This rising trend breaks a streak where this ratio had been falling since 2018-19. This cautious approach is confirmed by the latest Forward-Looking Survey on Private Sector Capex Investment by the Ministry of Statistics and Programme Implementation (MoSPI), cited in the Finance Ministry's report, which shows that Indian corporates are planning fewer investments in this financial year as compared to last year. According to this survey, Indian corporates expected to invest ₹6.6 lakh crore in 2024-25, up 57% from the ₹4.2 lakh crore of actual capital expenditure they incurred in 2023-24. However, in the current financial year 2025-26, this number is again expected to fall to ₹4.9 lakh crore, according to the survey. 'The slightly lower intended capital expenditure for FY26, though still above FY24 levels, reflects cautious planning after a strong FY25,' the MER noted. Overall, the MER said the trend indicates growing corporate confidence and a 'judicious approach to investment' in an evolving global scenario.
