GST Revenue Trends

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Fluctuating GST revenues indicate mixed signals for economic growth.

GST revenue collections this financial year have shown volatility, despite three out of seven months recording high collections. April saw collections exceed ₹2 lakh crore, driven by year-end filings with a 12.4% growth in gross receipts. July followed with a gross receipt of ₹1.82 lakh crore, marking a 10.3% rise. October’s pre-refund GST receipts were the second-highest in the past seven years. However, intermittent months showed declines, with a three-year low growth of 7.3% in June and a 40-month low of 6.5% in September.

In October, gross receipts recovered with an 8.9% year-on-year increase, though net growth slowed to 7.9%, indicating some improvement from September’s 3.9%. The year-to-date growth of net GST revenue has fallen to 9% from August’s 10.2%. Although indirect tax growth must accelerate to meet budget targets, this may not impact the deficit significantly due to robust direct tax performance.

October’s GST figures provide an early indicator of festive season consumption trends, but clearer insights will emerge with November’s receipts covering Dussehra and Deepavali sales. The RBI’s recent bulletin suggested economic momentum may be slowing, though festive demand offers optimism. Initial car sales data hint at a K-shaped recovery, with strong demand for premium SUVs. The GST Council, meanwhile, must prioritize tax rationalization on items like cement and insurance to boost consumption further.