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Mint
3 days ago
- Business
- Mint
₹2 trillion GST revenue in May, points to strong consumer sentiment, dumping concerns
New Delhi: Central and state governments collected over ₹2 trillion in Goods and Services Taxes (GST) in May before adjusting for refunds, official data showed on Sunday, a 16% annual improvement that sustains the robust tax performance seen in the previous month. The collections in May also benefited from the strong 25% growth in gross receipt of Integrated GST or IGST—the type of GST levied on imported goods, showing strong import value growth at the beginning of the current financial year amid trade uncertainty. In April too, IGST on imports had grown nearly 21% before refunds, compared with a 13.6% growth in March, prompting some experts to flag the possibility of dumping of goods into India by other countries as the Trump tariff announcement came in April. Also read: Government drove capex in pre-election year as private sector held back IGST accounted for about a fourth of gross GST revenue in May. GST collections from domestic sales too witnessed a strong 13.7% growth in May, faster than the 10.1% nominal GDP growth the Central government has forecast, suggesting strong consumer sentiments. Data also showed that industrialized states barring Gujarat, reported strong growth performance. While the largest state economy, Maharashtra, reported a 17% annual growth in GST revenue, Tamil Nadu reported a 25% jump, Karnataka 20% and Delhi 38%. Gujarat reported a muted 4% annual growth in May. After adjusting for tax refunds, Centre and states collected ₹1.74 trillion in May, 20.4% more than the revenue collected in the same time a year ago. In the first two months of the current financial year, net GST revenue of Centre and states grew at an average of 14%, faster than the projected nominal GDP growth for the current year. Signs of dumping? After refunds, net domestic GST revenue grew at 9.7% in May, nearly the same as in April, but the net customs revenue in May— IGST and cess on imports—grew at a spectacular 73% in May, compared with an unimpressive 5.2% in the previous month. Also read: Tax rate revamp on GST Council agenda; India to push FATF to grey list Pakistan The growth in IGST revenue from imports and the fact that export refunds are not growing correspondingly, reflect the fact that import growth far outstrips export growth, explained Vivek Jalan, founder and partner at Tax Connect Advisory Services LLP. The taxes paid on goods and services used in the products that are exported are refunded to exporters to make shipments competitive, as per policy. 'This may be a result of Trump 2.0 in as much that countries are dumping their goods in India, as they are selling less in the US. It may be required that India too may have to reciprocate, or react with anti-dumping duties in the near future on a variety of products," said Jalan. At the same time, sustained growth in the consumption tax revenue indicated positive consumer sentiments. To boost demand for goods and services in the economy, the government had announced a tax cut for middle-income earners in this year's budget which was estimated to cost the exchequer ₹1 trillion by way of forgone income tax receipts. Policymakers are also counting on above-normal monsoon, strong agriculture growth, growth supportive monetary policy and government capital expenditure to support economic growth this year. Also read: Lenders willing to offer lower rates to distressed firms since IBC took effect, says insolvency board M.S. Mani, partner indirect taxes, Deloitte India, said that tax collection in May which is better than the average monthly GST receipt in the last financial year, would provide significant fiscal headroom for the government. After refunds, the Central government collected over ₹31,000 crore, while states collected over ₹38,500 crore. Cess on luxury goods, aerated drinks and tobacco yielded ₹12,400 crore in May.
Mint
01-05-2025
- Business
- Mint
GST collection rises 12.6% to highest-ever of ₹2.37 lakh crore in April 2025
Goods and Services Tax (GST) collection rose 12.6 per cent Y-o-Y to an all-time high of about ₹ 2.37 lakh crore in April, government data showed on Thursday. The GST mop-up was ₹ 2.10 lakh crore in April 2024 -- the second highest collection ever since the roll-out of the indirect tax regime on July 1, 2017. In March 2025, the collection was ₹ 1.96 lakh crore. GST revenue from domestic transactions rose 10.7 per cent to about ₹ 1.9 lakh crore, while revenue from imported goods was up 20.8 per cent to ₹ 46,913 crore. Refunds issuance rose 48.3 per cent to ₹ 27,341 crore during April. After adjusting refunds, net GST collection rose 9.1 per cent to over ₹ 2.09 lakh crore in April. The data revealed that collections in March were 6.8 per cent higher than the ₹ 1.84 lakh crore recorded in the previous month. On the GST data, Saurabh Agarwal, Tax Partner, EY India, said, 'The record GST collections underscore the Indian economy's underlying strength in the face of global economic uncertainties.' "While a potential moderation in absolute GST collections is anticipated next month due to the current global economic climate, the overall outlook for the Indian economy remains optimistic," he added. Adding to this, Vivek Jalan - Partner Tax Connect Advisory Services LLP said, 'Amidst the global tariff war, the disruption caused by the heinous attack in Kashmir, and the related uncertainties, the growth of net GST revenues by 9.1 per cent over last year show the firm resolve of the Country to keep the dream of 'Viksit Bharat' going, amidst all odds.' 'However, what stands out is the stark variation between the growth of GST revenues of the Central vis-a-vis State jurisdictions in certain states,' added Jalan For example, in Tamil Nadu, the growth in GST revenues of Central formulations is 9.3 per cent while that in State formulation is 17 per cent. 'This aspect may be looked into by the State CGST and SGST Authorities. It would be just that taxpayers, whether in State or in Centre jurisdictions would be consistently treated,' he said. The Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST. Experts noted domestic collections have steadily grown over the last year with the first month of the current fiscal showing a 9.9 per cent growth. "The import collections show a higher growth of 20.8 per cent, which appears to be led by the export growth as visible by the significantly higher export refunds and this could be on account of the tariff pressures and anticipated tweaks to the tariffs leading to companies adjusting their supply chains," said Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India "Major states also show a positive growth which is a good sign for fiscal 25-26. The rising number of GST registrants points to the fact that more and more taxpayers (25L+ over FY25) are coming into the tax net and should result in higher collections," added Jaisingh.
