Though the government says the strong GST numbers in April 2024 were recorded on a strong rise in domestic transactions and imports, experts says it also shows the Indian economy‘s fast formalisation
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The GST collection in April 2024 was recorded as the highest ever at Rs 2.10 lakh crore, according to the latest official data. The collection figures follow the rising trend as the previous month of March 2024 also reported the second-highest collections. Though the government said the strong GST numbers were recorded on the back of a strong increase in domestic transactions and imports, experts said it also shows the Indian economy’s fast formalisation.
“The Indian economy is on a fast track to formalisation and businesses are fast becoming organised and are coming into the mainstream,” said Vivek Jalan, partner at Tax Connect Advisory Services LLP.
On GST collection trends, he said that GST collections have recorded an average monthly revenue of around Rs 0.9 lakh crore to April 2024 since its implementation in July 2017.
“GST revenues have witnessed an approximate growth of 13 per cent per annum on an average between July 2017 and April 2024,” Jalan added.
Considering inflation of 5 per cent and GDP growth of 7 per cent, there has been an average buoyancy of 1 per cent on an average per annum over the last seven years, which also have witnessed a two-year unprecedented slump in terms of COVID-19-induced lockdowns, he said.
Abhishek Jain, partner and national head (indirect tax) at KPMG, said, “The consistent growth in GST collections with this one being the highest collection ever is a big cheer and reflects upon the strong domestic economy, especially given the fact that growth on account of domestic transactions is 13.4 per cent as compared to imports which is at 8.3 per cent.”
Another significant reason for this growth could be linked to deadline for GST audits and corresponding notices issued during this year, Jain added.
Vivek Jalan also said the economy is thus getting set for a Big Bang final Budget in July 2024 and looking towards bringing alcohol, petrol, diesel and real estate under GST, apart from the implementation of the Direct Tax Code replacing the age old Income Tax Act.
He also expects the implementation of the Global Minimum Tax.
“The gross goods and services tax (GST) collections hit a record high in April 2024 at Rs 2.10 lakh crore… After accounting for refunds, the net GST revenue for April 2024 stands at Rs 1.92 lakh crore, reflecting an impressive 17.1 per cent growth compared to the same period last year,” the finance ministry said in a statement on May 1.
The growth gross GST collection in April 2024 represents a significant 12.4 per cent year-on-year growth, driven by a strong increase in domestic transactions (up 13.4 per cent) and imports (up 8.3 per cent), it said.
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Maharashtra collected the highest GST in April 2024 at Rs 37,671 crore, followed by Karnataka (Rs 15,978 crore), Gujarat (Rs 13,301 crore), Uttar Pradesh (Rs 12,290 crore) and Tamil Nadu (Rs 12,210 crore), according to the latest data.
