GST Collection Expected to Surpass ₹20 Lakh Crore Mark
Officials familiar with the matter have indicated that the Goods and Services Tax (GST) collection for the current financial year ending on March 31 is likely to exceed ₹20 lakh crore, marking a substantial growth of approximately 12% compared to previous years. This surge is attributed to increased economic activity and improved compliance facilitated by technological advancements.
Additionally, it is anticipated that GST cess collections for the period of 2023-24 will be robust, amounting to around ₹1.45 lakh crore. This optimistic outlook raises the possibility of an early cessation of the GST cess, originally slated to continue until March 31, 2026, as per the initial deadline set by the government.
The extension of the GST cess, levied on luxury items and goods such as automobiles, liquor, cigarettes, aerated water, and coal, until March 31, 2026, was primarily aimed at repaying the ₹2.69 lakh crore debt incurred to compensate states for revenue shortfalls during the pandemic. However, officials suggest that if the principal and interest amounts are repaid earlier, the cess could be discontinued before the stipulated deadline.
Impressive Growth Trajectory
Recent data suggests a promising trajectory for GST collections, with projections indicating that March 2024 figures may surpass ₹1.60 lakh crore. This surge is expected to push total gross revenues for the entire financial year beyond the ₹20 lakh crore mark, underscoring a consistent trend of growth.
Throughout the fiscal year 2023-24, the average monthly gross collections stood at ₹1.67 lakh crore, with indications pointing towards a similar performance in March. The reliability of these projections is supported by electronic waybill numbers, which serve as a digital compliance mechanism to monitor the movement of goods under the GST regime.
Economic Performance and Revenue Growth
The robust performance of GST collections mirrors the resilience of the domestic economy. Notably, February 2024 witnessed collections surpassing ₹1.68 lakh crore, marking a 12.5% year-on-year increase and the fourth-highest figure recorded since the implementation of the GST regime in July 2017. January 2024 also saw impressive collections, exceeding ₹1.74 lakh crore, the second-highest ever reported.
Economic indicators further reinforce this positive outlook, with the National Statistical Office reporting an 8.4% growth in the Indian economy during the third quarter of 2023-24. This growth is attributed to increased investment, expanded manufacturing and services activities, and an uptick in tax revenue.
Expert Insights
MS Mani, a partner at Deloitte India, commented on the significance of robust GST collections, emphasizing that reaching an all-time high figure of ₹20 lakh crore would reaffirm the positive macroeconomic data on GDP growth and other key economic parameters for the current fiscal year. This underscores the promising trajectory of India’s economic recovery and growth prospects.
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