Gross Goods and Services Tax (GST) collections came in at Rs 1.74 trillion in June (May transactions), up 8% on year, according to official sources. This was against Rs 1.73 trillion collected in the previous month.
The year-on-year growth rate during June was the slowest in around three years. In May, the growth rate was 10%, the slowest in 34 months.
The slowdown in GST revenue growth could be attributed to slower economic activity during the election period, and a plateauing of the collections after reporting a robust trend for a long period.
During June, the government settled Rs 39,586 crore to the Central GST from Integrated GST collections, and Rs 33,548 crore to State GST, the source said.
Pratik Jain, partner, PwC India said: “While the growth in collection in June seems to be on a lower side compared to previous month, overall GST collections have shown an encouraging trend over the last few months.”
Saurabh Agarwal, tax partner, EY said that timely audits, scrutiny measures, and effective enforcement by the Central Board of Indirect Taxes and Customs (CBIC) have contributed to the impressive collections, which crossed the 1.5 trillion mark for the fourth-straight month. “This robust performance reflects a buoyant economy, with businesses demonstrating commendable self-compliance,” he said.
However, some experts say, the sub-10% growth during June could be attributed to low recoveries by the CBIC, as most of the cases are now settled. “Cases pertaining to FY18, FY19, and FY20, are mostly settled now, and recoveries have been made,” noted Ankur Gupta, practice leader – indirect tax at SW India.
From FY21 onwards, the GST compliance process was streamlined, hence, it’s likely that due to low recoveries, the 12% growth–being witnessed in the past several months–will ease, he said.
