Revenues from domestic transactions grew 13.4%, the Finance Ministry said, while goods imports yielded an 8.3% uptick in the indirect tax collection. File
| Photo Credit: K.V.S. Giri

Year-end compliances lifted India’s gross Goods and Services Tax (GST) revenues past a record ₹2.1 lakh crore in April, reflecting a 12.4% growth over the previous highest tally of ₹1.87 lakh crore in the same month last year. Taking refunds into account, GST revenues for the month were at ₹1.92 lakh crore, 15.5% higher than the collection in April 2023.

Finance Minister Nirmala Sitharaman attributed the ₹2 lakh crore-plus GST revenues in April to “the strong momentum in the economy and efficient tax collections”, and asserted that there were no dues pending on account of IGST (Integrated GST) settlement to the States.

Revenues from domestic transactions grew 13.4%, the Finance Ministry said, while goods imports yielded an 8.3% uptick, helping GST inflows “breach the landmark milestone of ₹2 lakh crore”. This marks a rebound in revenues from goods imports that had contracted 5% in March, while domestic transactions’ growth weakened in April relative to the 17.6% uptick recorded in the previous month. Overall, gross GST revenues had grown at a slower pace of 11.5% in March, while net revenues had risen 18.4%, faster than April’s growth.

April’s GST revenues, for transactions undertaken in March, are typically the highest in a year as taxpayers square their books for the financial year and remit any pending dues to meet compliance deadlines. Following last month’s record spike, experts project revenues to moderate in coming months, with some growth expected over the ₹1.68 lakh crore monthly average GST collection witnessed in 2023-24.

Compensation cess

GST compensation cess collections also hit an all-time high of ₹13,260 crore last month, which included ₹1,008 crore collected on imported goods. The cess is levied on select goods such as automobiles and tobacco products, over and above the peak GST rate of 28%.

Initially introduced for five years to compensate States for revenue losses arising from the 2017 switch to the GST regime, the cess is now being used to repay loans taken during the pandemic to recompense States amid a lockdown-triggered collapse in revenues.

The Ministry emphasised that there had been a positive performance across components, pointing to Central Goods and Services Tax (CGST) revenues of ₹43,846 crore, State GST revenues of ₹53,538 crore and Integrated Goods and Services Tax (IGST) inflows of ₹99,623 crore. The IGST collections included ₹37,826 crore collected on imported goods.

“The Central government settled ₹50,307 crore to CGST and ₹41,600 crore to SGST from the IGST collected. This translates to a total revenue of ₹94,153 crore for CGST and ₹95,138 crore for SGST for April, 2024 after regular settlement,” the Ministry statement said.

State-wise collections

Four States, including the erstwhile State of Jammu and Kashmir, Arunachal Pradesh, and Sikkim, recorded a contraction in revenues last month. Eight States saw muted growth relative to the 13.4% overall growth in domestic revenues, with Jharkhand (3%), Uttarakhand (4%), and Tamil Nadu (6%) seeing the weakest growth. Kerala and Karnataka both registered a 9% increase in revenues, while Madhya Pradesh and Telangana collections grew 11% each.

Revenues in Gujarat, Maharashtra and West Bengal grew close to the national average at 13%. Mizoram reported the highest growth at 52%, followed by Assam (25%) and Delhi, Bihar and Goa, each of which clocked 23% growth. Haryana reported a 21% rise in revenues, while the growth was 20% for Tripura, 19% for Uttar Pradesh, and 17% for Odisha. Revenues in strife-affected Manipur also reported a 15% uptick.

“A significant reason for this growth could be linked to deadline for GST audits and corresponding notices issued during this year,” said Abhishek Jain, partner and national head for indirect tax at KPMG.

Image used for representational purposes only.
| Photo Credit: Special Arrangement

India’s gross revenues from the Goods and Services Tax (GST) hit a three-month high to cross ₹1.65 lakh crore in July. However, at 10.8%, it was the slowest uptick in collections since July 2021 compared to revenues from the same month last year.

Revenues from domestic transactions and services imports grew 15% in July, which marked the fifth occasion that GST revenues have crossed the ₹1.6-lakh-crore mark during a month. Sequentially, July’s collections, for transactions undertaken in June, were 2.2% higher than the previous month’s GST kitty.

The Finance Ministry did not disclose the trend for GST collections on import of goods, but back-of-the-envelope calculations indicate that there was a 0.8% decline in July from a year ago. Integrated GST collections on goods imports dropped by 0.43% to ₹41,239 crore, while GST Compensation Cess levies on goods imports dropped 15.6% to ₹840 crore.

Overall GST Compensation Cess levies, which will continue till at least March 2026 to repay market borrowings made amid the pandemic to compensate States, grew 7.9% in July to touch nearly ₹11,780 crore.

Central GST or CGST collections in July stood at ₹29,773 crore, while State GST (SGST) yielded ₹37,623 crore. The total IGST collection came to ₹85,930 crore, with around 52% of that revenue coming from domestic transactions.

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“The government has settled ₹39,785 crore to CGST and ₹33,188 crore to SGST from IGST. The total revenue of the Centre and the States in the month of July 2023 after regular settlement is ₹69,558 crore for CGST and ₹70,811 crore for the SGST,” the Finance Ministry said.

While overall domestic revenues grew 15%, as many as 18 States recorded 15% or higher growth, while 11 States grew at a slower pace. 

Strife-torn Manipur was the only State to record a contraction, with a 7% drop in revenues. However, the north-eastern States of Mizoram (47%), Meghalaya (27%), Sikkim (26%), recorded the highest growth in revenues, followed by Delhi (25%), Uttar Pradesh (24%) and Tripura (23%).

At the other end of the spectrum, Nagaland, with a 3% rise in revenues, Chhattisgarh with 4%, and Andhra Pradesh (5%) saw the weakest growth, followed by Gujarat and Telangana, both of which clocked a 7% growth.

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“The past trend of six key States generating almost 60% of the nationwide GST collections continues in the current month as well,” noted MS Mani, partner at Deloitte India, adding that compliance drives from the Revenue department were yielding results with steady revenue trends.

The ₹1.6-lakh-crore monthly collection mark may be the new norm for GST revenues, said Abhishek Jain, partner and national head for indirect tax at KPMG, who said revenues might rise further with the upcoming festival season and the approaching “normal period of limitation” for 2017-18 assessments.

Mandatory e-invoicing for all firms with a turnover of ₹5 crore, which kicks in this month, is also expected to bolster revenues, though it may pose some transition challenges for smaller businesses.

“Smaller taxpayers may have trouble embracing the new compliance paradigm, but it would ultimately expedite operations, improve transparency, and encourage more transactions with larger businesses, despite the transition’s potential difficulties,” said Saloni Roy, partner at Deloitte India.