The proceeds from the indirect tax were higher than ₹1.74 trillion collected by the governments in June 2024.
The proceeds from the indirect tax were higher than ₹1.74 trillion collected by the governments in June 2024.
The central and state governments have collected ₹1.82 trillion in goods and services tax (GST) in July, marking a 10.3% year-on-year increase, according to finance ministry data. GST receipts also rose compared to the ₹1.74 trillion collected in June 2024.
While July's GST collections fell short of the record ₹2.1 trillion in April, experts said they were in line with the robust GST revenue receipts, and is likely to further increase as the festive season approaches. July's GST figures represent sales from June 2024, which is typically a slower month before the onset of the festivities.
"A 10%-plus growth in collections for this year vis-a-vis the last year aligns well with expectations and depicts signs of stability and maturity of GST implementation in India. With festivities coming up in the next few months, the collections should witness a further increase," said Abhishek Jain, indirect tax head and partner, KPMG India.
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At the net level, which includes refunds of ₹16,283 crore, GST collections rose by 14.4% for the month, despite refunds being 19.4% lower compared to the corresponding month of last year. Producer states Maharashtra, Uttar Pradesh, Karnataka and Tamil Nadu were the largest collectors of GST by value.
"There appears to be a wide divergence in collections growth compared with the same month last year across states even among the large manufacturing and consuming states. While Maharashtra, Gujarat and Karnataka have shown 11-13% a growth, Tamil Nadu, Andhra Pradesh, and Uttar Pradesh are in the range of -7% to 5%. This divergence should be further evaluated based on sectoral data for these states," said M.S. Mani, partner, Deloitte India.
However, the highest growth was observed from Nagaland, Manipur, Andaman and Nicobar, and Ladakh, albeit on a low base. "The surge in tax collections from Nagaland, Manipur, Andaman & Nicobar, and Ladakh suggests heightened economic activity and consumption in these developing regions of India," said Saurabh Agarwal, tax partner, EY.
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"Further, a potential stagnant or decline in collections during August (compared to July) is anticipated due to the monsoon season's impact on overall economic momentum," Agarwal added.
In April-July 2024, gross GST collections stood at ₹7.38 trillion, up 10.2% from ₹6.70 trillion a year-ago.
Manufacturing activity
India's manufacturing activity also remained steady in July, driven by new orders leading to higher output. The HSBC final India Manufacturing Purchasing Managers Index (PMI), compiled by S&P Global, stood at 58.1 in July, after recording 58.3 in June, 57.5 in May, and 58.8 in April.
Also Read: India's manufacturing growth eases slightly in July
GST collections have steadily risen annually since the inception in FY18, with more businesses complying with India's indirect taxation regime and entering the formal sector. Gross GST collections have nearly tripled from ₹7.41 trillion in FY18 to ₹20.18 trillion in FY24.
The finance ministry has forecast central GST revenue, including cess, to reach ₹10.62 trillion for FY25, higher than the revised estimates of ₹9.56 trillion for FY24 in its budget presentation.