In December, Goods and Services Tax (GST) collections witnessed a dip to a three-month low, reaching Rs 1.65 trillion. This decline is attributed to a slowdown in economic activities post-Diwali. Despite the drop, the collection remains elevated, reflecting resilience in the economy.
Year-on-Year Growth: The year-on-year growth rate fell to a three-month low of 10.3 percent, compared to December 2022-23’s Rs 1.49 trillion. The dip is linked to transactions in November, marked by post-Diwali holidays and reduced economic activity.
Consistent Fiscal Confidence: Despite the decline, GST collections have stayed above Rs 1.6 trillion for six out of nine months this fiscal year, instilling fiscal confidence. The average monthly gross GST collection of Rs 1.66 trillion for the first nine months represents a 12 percent rise from the corresponding period in FY23.
Central GST (CGST) Performance: CGST, after integrated GST settlement, reached Rs 70,501 crore in December, the third-highest in nine months. With Rs 6.26 trillion collected during April-December, it stands at 77 percent of the estimated Rs 8.12 trillion in the Budget Estimates for 2023-24.
Outlook and Analysis: With three months remaining in the fiscal year, CGST collection is poised to surpass the Budget Estimate. Despite challenges like dwindling disinvestment receipts and expected higher revenue expenditure, robust direct tax collection and CGST receipts provide optimism. Notably, every state, except Rajasthan, Chhattisgarh, and Jharkhand, witnessed growth in GST collection, indicating varied economic activities across regions.
Conclusion: The consistent performance of GST collections above Rs 1.6 trillion, coupled with robust direct tax collection, reflects overall fiscal confidence despite temporary fluctuations and regional disparities.
