India's gross Goods and Services Tax (GST) collections grew by 15.4% year-on-year in July to over ₹2.11 lakh crore, pointing to robust economic growth and higher domestic consumption, and higher tax receipts from imports.
As per the official data, the gross GST collections in July stood at around ₹2.11 lakh crore, compared to the same level of ₹1.83 lakh crore in July.
Break-up of GST Collections
July GST revenue consisted of:
- Central GST (CGST): ₹39,835 crore.
- State GST (SGST): ₹47,881 crore.
- Integrated GST (IGST): Over ₹1.23 lakh crore of taxes on imports.
And the strong IGST collections indicate sustained import activity and healthy interstate trade in the month.
Net GST Revenue After Refunds
GST refunds also increased during July.
- Refunds issued: ₹29,968 crore (up 13.1% year-on-year).
- Net GST revenue: Over ₹1.81 lakh crore after accounting for refunds.
The revenue growth in refunds is due to an increased rate of processing tax claims, while revenue growth is robust.
Experts See Healthy Momentum
And as for the numbers, Abhishek Jain, Indirect Tax Head & Partner at KPMG, said the July collections indicate continued strength in India's GST system.
Jain added that import-related tax collections played a key role in growth. But he added that more analysis is necessary to determine if the increase was generated by higher import volumes, higher imports of finished goods or raw materials, or by currency fluctuations like a weak rupee.
He was also pleased that domestic GST collections were still steady and indicated that changes in GST 3.0 could be made to refund companies affected by the inverted duty structure on input services.
West Bengal Registers Moderate Growth
West Bengal had GST collections of ₹5,564 crore in July.
This represents:
- 2% year-on-year growth compared to July.
- 9.5% increase over June's collection of ₹5,082 crore.
Although the GST revenue has increased for the second consecutive month on a year-on-year basis, its growth is still below the national average for the state.
Positive Outlook
GST collections are indicative of the growing resilience of India’s economy in the face of global uncertainty. Higher domestic tax collections, robust imports, and efficient tax administration are still supporting government revenues.
Economists are hopeful that continued GST growth will enhance public finances in the long term, provide more fiscal flexibility in the form of fiscal resources and fiscal flexibility to invest in infrastructure and welfare spending, and improve business activity across sectors.
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