Revenue for October is second highest monthly collection, next only to April 2022
The government collected Rs 1.52 trillion as goods and services tax (GST) in October, a 16.6 per cent rise year-on-year, driven by festival-related spending, higher tax rates, and better compliance. This was the second-highest monthly collection since the implementation of the indirect tax regime in July 2017. GST collection touched a record high of Rs 1.67 trillion in April.
Of the total gross GST mop-up in October, central GST (CGST) was Rs 26,039 crore, state GST (SGST) Rs 33,396 crore, integrated GST (IGST) Rs 81,778 crore (including Rs 37,297 crore collected on import of goods), and cess was Rs 10,505 crore (including Rs 825 crore collected on import of goods), according to the provisional data released by the finance ministry on Tuesday.
“This is the ninth month —and the eighth month in a row — that monthly GST revenue has been more than Rs 1.4 trillion,” the ministry said.
In September 2022, as many as 83 million e-way bills were generated compared to 77 million in the previous month.
Economists expect CGST collection to exceed the FY23 Budget Estimates by Rs 1.3-1.4 trillion.
“The sharp sequential pick-up in the headline GST collection in October reflects a combination of quarter-end flows relating to the transactions in the previous month, as well as the surge in GST e-way bills ahead of a robust festival season. With the festival season in October, the generation of GST e-way bills is expected to have remained high, which should bolster the collection in November,” said Aditi Nayar, chief economist, ICRA.
Nayar said the dip in the YoY growth in GST collection in October was expected given the normalising base, and may continue for the next few months. “We continue to expect CGST collection to exceed the FY2023 BE by Rs 1.3-1.4 trillion,” she said.
The Budget 2022 set the CGST target of Rs 6.6 trillion, excluding compensation cess.
Further, the total revenue of the Centre and the states, after regular as well as ad hoc settlements, in October was Rs 74,665 crore for CGST and Rs 77,279 crore for SGST.
Major states have reported an increase in collections, indicating that it is a broad-based phenomenon across the country. State-wise collection showed an increase of 18 per cent compared to the year-ago period.
“While the festival season aided the GST collection, the increased administration by both the Centre and states have also boosted the revenue growth,” said Saurabh Agarwal, tax partner, EY India.
“With both the revenue wings (CBDT and CBIC) charged with increasing tax collection, healthy collection can be expected in the coming months too. The self-sustained economy seems to be trending with a further decline in tax collection on imports due to various fiscal policies of the government,” Agrawal added.