India’s October GST Revenue Achieves Second-Highest Record with 13% YoY Increase
India’s Gross Goods and Services Tax (GST) collections for October 2023 have experienced a year-on-year increase of 13%, totaling Rs 1.72 lakh crore (approximately $23 billion). This achievement marks the second-highest collection on record, surpassed only by April’s figure of Rs 1.87 lakh crore (around $25 billion).
October’s collections have shown a notable rise of Rs 10,000 crore (around $1.3 billion) compared to the previous month. M S Mani from Deloitte India highlighted that this growth is primarily driven by strong economic conditions and the tax authorities’ diligent efforts to identify instances of short payments and tax evasion.
The gross GST revenue for October marked a 13% increase in earnings from domestic transactions and goods imports compared to the same month last year. This positive trend has elevated the average monthly GST collection for the fiscal year 2023-24 to Rs 1.66 lakh crore (approximately $22 billion), reflecting an 11% increase from the prior financial year.
A detailed analysis of October’s collections reveals that Rs 30,062 crore was allocated to Central GST (CGST), Rs 38,171 crore to State GST (SGST), Rs 91,315 crore to Integrated GST (IGST, of which Rs 42,127 crore came from goods imports), and Rs 12,456 crore as cess (including Rs 1,294 crore from imports).
Notably, there was an uptick in the allocation to CGST and SGST from IGST collections, amounting to Rs 42,873 crore and Rs 36,614 crore, respectively. Abhishek Jain from KPMG attributed this significant rise to the resolution of disputes from the fiscal year 2017-18, as the standard limitation period concluded on September 30.
Although October’s GST figures have shown growth compared to the previous year, the cumulative GST revenue from April to October 2023 recorded a growth rate of only 11%, falling short of the budgeted 12% growth estimate, as pointed out by Vivek Jalan from Tax Connect Advisory. He cautioned that even a slight shortfall of 1% in GST revenue could impact the fiscal deficit target for FY 2023-24 by approximately 0.03%. However, the ongoing festive season may support continued consumption, particularly in significant manufacturing and consuming states.