“The 7.3% growth in GST collections is in line with a bit of a slowdown in GDP (gross domestic product) growth,” said Abhishek Jain, indirect tax head and partner at KPMG. “As it’s expected that GDP growth will inch north in this quarter, the GST collections should mirror the same.”
The Indian economy had slowed to 5.4% in the September quarter, the lowest in seven quarters. But the latest data on growth in eight infrastructure sectors, which account for a 40.27% weight in the Index of Industrial Production (IIP), picked up the pace last month. It rose 4.3% in November, as per official data.
Gross domestic collections rose 8.4% to `1.32 lakh crore, while cess collections slipped marginally to `12,003 crore. After refunds, net GST collections stood at `1.54 lakh crore, up 3.3%.The overall gross GST collections from April to December stood at `16.33 lakh crore, up 9.1% against the corresponding period last year. “GST collections have slowed down slightly, which is typical after the holiday season,” said Saurabh Agarwal, tax partner, EY. “These are well in line with expectations as we have been witnessing a slight decrease in consumer spending over the past few months.”
Some experts expect measures in the upcoming budget to lift consumption. “Given the slowdown in GST collection, it will be interesting to see if the government takes specific measures to boost consumption in the upcoming budget,” said Pratik Jain, partner, PwC.
They also cited sluggish growth in some states. “The below 5% increase in major states like UP, Bihar, West Bengal, Gujarat and MP would be an area of concern for policy makers who may be considering the sectoral breakdown of the GST collections in these states to understand the reasons for the same,” said MS Mani, partner, Deloitte.
Refunds worth `22,490 crore were issued in December, up 45.3% from the same month last year. “The significant increase in both domestic and export refunds indicates that the overall refund framework is now stable and its implementation on a sound footing,” he said.
Gross revenue from imports was `44,268 crore, up 3.9%. Experts said this was likely influenced by the rise in the value of the dollar from last year.
