GST mop-up tops Rs 1.4L cr for 7th month

Even though the share of collections from imports fell to 28 per cent from 30 per cent, high inflation rate, rise in retail prices of many consumption goods along with expansion in usage of e-invoicing and increased actions by tax authorities to ensure higher compliance supported the rise in GST collections. August was the first full month reflecting the complete impact of the rate hike decisions taken in the 47th GST council meeting, that came into effect on July 18.

GST exemption was withdrawn from ‘pre-packaged and labelled’ retail packs — including food items such as curd, lassi, puffed rice, wheat flour, buttermilk — but items sold loose or unlabelled still remain exempt. Pre-packaged and pre-labelled food items such as grains, curd, lassi, paneer, jaggery, wheat flour, puffed rice, buttermilk and meat/fish (except fresh and frozen) are now taxed at 5 per cent, at par with branded items.

GST revenues from import of goods were 39 per cent higher, while the revenues from domestic transactions (including import of services) were 22 per cent higher. Monthly GST revenues have been over the Rs 1.4-lakh crore mark for the last seven months, with the monthly average for this fiscal at Rs 1.48 lakh crore. The Finance Ministry said the year-on-year growth in GST revenue during April-September 2022 is 27 per cent, continuing to “display very high buoyancy”.

“This month witnessed the second highest single day collection of Rs 49,453 crore on 20th September with second highest number of 8.77 lakh challans filed, next only to Rs 57,846 crore collected on 20th July 2022 through 9.58 lakh challans, which pertained to end of the year returns. This clearly shows that the GST portal maintained by GSTN has fully stabilized and is glitch free,” it added.

E-way bills, used in inter-state transactions, showed a marginal pickup. During August 2022, 7.7 crore e-way bills were generated, which were marginally higher than 7.5 crore in July, the ministry’s statement said. “September also saw another milestone getting crossed when more than 1.1 crore e-way bills and e-invoices, combined (72.94 lakh e-invoices and 37.74 lakh e-way bills), were generated without any glitch on the portal run by NIC on 30th September 2022,” it added.

Some experts, however, said that the GST collections have not rise in tune with the increase in e-way bills, which only reflects activity for the goods segment and not the services sector. Also, the impact of inflation in the pickup in GST collections is significant.

In a report released on September 29, India Ratings and Research said high GST collection for nearly two years now is due to a combination of three factors – (i) improved compliance/enforcement, (ii) higher nominal GDP (due to inflation), and (iii) higher imports (due to elevated commodity prices). “Higher GST collections should not be construed as an indication of a rise in consumption demand. In real terms, private final consumption expenditure (proxy for consumption demand) in Q1 FY23 grew 9.9% over Q1 FY20, but in nominal terms it grew 36% during the same period. The real and nominal GDP during the same period grew 3.8% and 31.4%, respectively. This clearly suggests the surge in GST collections is more due to the higher inflation than higher consumption,” it said.

Going ahead, experts said that GST revenues will improve with the onset of the festive season.

“The collections in the next three months are expected to be even more robust due to the higher consumption expected during the festive season and the extension of the mandatory e-invoice protocol to taxpayers having turnover above Rs 10 Cr from 1st October. The statewise data on collections reflects the good growth in collections across key states with many large states demonstrating an above 20% increase in collections compared to the last year,” MS Mani, partner, Deloitte India said.

At least 18 states/UTs recorded a higher than 20 per cent growth in GST collections.

Out of gross GST revenue of Rs 1,47,686 crore, CGST — the tax levied on intra-state supplies of goods and services by the Centre — is Rs 25,271 crore and SGST — the tax levied on intra-state supplies of goods and services by the states — is Rs 31,813 crore, said the Finance Ministry.

IGST — tax levied on all inter-state supplies of goods and services — is Rs 80,464 crore (including Rs 41,215 crore collected on import of goods) and cess Rs 10,137 crore (including Rs 856 crore collected on import of goods), it said.

The government has settled Rs 31,880 crore to CGST and Rs 27,403 crore to SGST from IGST. The total revenue of Centre and the states in September after regular settlement is Rs 57,151 crore for CGST and Rs 59,216 crore for SGST, the ministry added.