However, June's GST proceeds were lower than the record collection of ₹2.1 trillion reported in April—but in line with the trend of robust GST revenue receipts.
New Delhi: Central and state governments collected ₹1.74 trillion in Goods and Services Tax (GST) receipts in June, 7.74% more than the proceeds from the indirect tax a year ago, a person with direct knowledge of the matter said on Monday.
To be sure, June's GST proceeds were lower than the record GST collection of ₹2.1 trillion reported in April. But they were in line with the trend of robust GST revenue receipts.
GST collections during May stood at ₹1.73 trillion.
Against expectations
GST revenue in May and June, representing transactions in the first two months of the new financial year (FY25), was expected to come down from April's high—the outcome of year-end sales by companies.
As part of the settlement of taxes on account of inter-state sales, the Central government collected ₹39,586 crore while states collected ₹33,548 crore in June, the person mentioned above added, under the condition of anonymity.
During the April-June 2024 period (Q1, FY25), gross GST collection stood at ₹5.57 trillion, up from ₹5.06 trillion during the year-ago period.
A finance ministry spokesperson didn't immediately respond to emailed queries.
"Overall GST collections have shown an encouraging trend over last few months," Pratik Jain, Partner, PwC India.
"The industry hopes that the trend will enable the GST council to reinitiate the rate rationalisation exercise as indicated in the last council meeting," Jain added.
The GST proceeds for June came from sales in the previous month, May.
"An (over) seven per cent growth from June collections of last year, coupled with a consistent average monthly collection of ₹1.75 trillion, reinstates consistency in growth of the economy," said Abhishek Jain, Indirect Tax Head & Partner, KPMG.
Manufacturing activity slips
India's manufacturing activity slipped to a three-month low in May as intense heatwaves reduced working hours, impacting volumes, and thus impacting GST collections.
The HSBC final India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, eased to 57.5 in May from 58.8 in April and 59.1 in March.
On an annual basis, GST collections have steadily risen since its inception in FY18, with more businesses becoming compliant and entering the formal sectors.
Gross GST collections have nearly tripled annually from ₹7.41 trillion in FY18 to ₹20.18 trillion in FY24.
The Finance Ministry has forecast a Central GST revenue collection of ₹10.67 trillion for FY25 in its interim budget presented in February.