Collection from Goods & Services Tax (GST) dipped to a 3-month low in December to ₹1.76 lakh crore, Government data released on Wednesday showed. However, this marks an increase of nearly 7 per cent from ₹1.65 lakh crore collected in the same month last year.

Collection in December is related with goods consumed and services availed in November during which consumption typically slows down as in a post-festival slump. Experts feel that net collection in April-December period has shown some stability while State-wise growth reflects mixed trend.

Data showed that the Central GST collection stood at ₹32,836 crore, State GST at ₹40,499 crore, Integrated IGST at ₹47,783 crore and Cess at ₹11,471 crore. During the month under review, GST from domestic transactions grew 8.4 per cent to ₹1.32 lakh crore, while revenues from tax on imports rose about 4 per cent to ₹44,268 crore. Refunds worth ₹22,490 crore were issued, registering 31 per cent increase over the year-ago period. After adjusting refunds, net GST collection increased by 3.3 per cent to ₹1.54 lakh crore.

According to Saurabh Agarwal, Tax Partner at EY India, GST collections have slowed down slightly in a manner typical post the holiday season. It is well in line with expectations slight decrease has been witnessed in consumer spending over the past few months. “Several States and Union Territories, including Jammu & Kashmir, Himachal Pradesh, Sikkim, and the Andaman & Nicobar Islands, are experiencing strong growth in GST revenue, indicating positive economic development in these regions,” he said.

MS Mani, Partner with Deloitte India, said while the overall net GST collections are showing a Y-T-D (April-November) increase of 8.6 per cent, this is despite an increase of 13.5 per cent y-o-y in respect of refunds, signifying the stability in GST collections and a good GST framework for refund processing.

“The below 5 per cent increase in major States like UP, Bihar, WB, 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,” he said.

Eyeing incentives

Some experts are expecting incentives from the government to boost consumption which, in turn, will have a positive impact on GST collection. Pratik Jain, Partner at PwC India, said while the overall growth in YTD collection till December 24 is over 10 per cent for domestic sales, growth for imports is only 2 per cent. Also, the quantum of export-related refunds has gone up substantially. 

“Given the slowdown in GST collections, it will be interesting to see if the government takes specific measures to boost consumption in the upcoming budget. One of the ways to boost consumption is to rationalise the GST rates, which the GST council is currently working on,” he said.