High GST collection reflects India’s vibrant economic trend

Of the total Rs.1.61 lakh crore collected in June, CGST was Rs.31,013 crore, SGST was Rs.38,292 crore, IGST was Rs.80,292 crore

PGurus Newsdesk

July 6, 2023

Of the total Rs.1.61 lakh crore collected in June, CGST was Rs.31,013 crore, SGST was Rs.38,292 crore, IGST was Rs.80,292 crore

Impact of higher GST collection on the Indian economy

Reflecting the vibrancy of the Indian economy, the gross Goods and Services Tax (GST) revenue collected in the month of June 2023 was Rs.1,61,497 crore, which is 12 percent higher than last year.

Of the total Rs.1.61 lakh crore collected in June, CGST was Rs.31,013 crore, SGST was Rs.38,292 crore, IGST was Rs.80,292 crore (including Rs.39,035 crore collected on import of goods) and cess is Rs.11,900 crore (including Rs.1,028 crore collected on import of goods).

This high collection of GST indicates that consumption levels are going up in the country and economic activities are rising. High GST collection certainly means higher revenue in the government’s coffer.

“On many common-use items, tax under GST has been lower compared to pre-GST tax rates: Items such as tea, milk powder, sugar, edible vegetable oils, spices and footwear (priced up to Rs.500) attract taxes of 5 percent under GST, compared with earlier tax incidence of 6-10 percent,” Nirmala Sitharaman, Indian Finance Minister tweeted.

According to a Deloitte Insights paper by Dr. Rumki Majumdar, “While betting on consumption-driven growth is obvious given India’s large, young, and rising share of the upper middle-income population (with a high propensity to spend), we believe that investment will play an important role over the next two years. It is investments that will provide India with the necessary momentum to take off on a path of sustained domestic demand-led growth for decades to come.”

“Our overall outlook for the Indian economy remains positive: We expect investments to see a turnaround and thrust the economy into sustainable growth. India will likely grow at a moderate pace of 6-6.5 percent in FY 2023-24, as the global economy continues to struggle. Growth in the next year will likely pick up as investments kick-start the virtuous circle of job creation, income, productivity, demand, and exports supported by favourable demographics in the medium term,” the paper said.

“Two observations are worth noting: Despite the global slowdown, exports performed well, probably because of the depreciated currency against the dollar. While goods exports remained modest, India’s services exports skyrocketed by 30 percent between April and February. A strong digitization drive the world over, cost-cutting measures by businesses to deal with the impending slowdown, and the growing trend of remote working increased demand for exports of services in technology, where India has a comparative advantage. Interestingly, the share of business and professional services in total services exports also increased as companies globally now prefer outsourcing a wide range of professions, such as accounting, audit, R&D, quality assurance, and after-sales service,” it added.

The government has settled Rs.36,224 crore to CGST and Rs.30,269 crore to SGST from IGST. The total revenue of Centre and the states in the month of June 2023 after the regular settlement is Rs.67,237 crore for CGST and Rs.68,561 crore for SGST.

The revenues for the month of June 2023 are 12 percent higher than the GST revenues in the same month last year. During the month, the revenues from domestic transactions (including import of services) are 18 percent higher than the revenues from these sources during the same month last year.

It is for the fourth time, the gross GST collection has crossed Rs.1.60 lakh crore mark. The average monthly gross GST collection for the first quarter of the FY 2021-22, FY 22-23 & FY 23-24 are Rs.1.10 lakh crore, Rs.1.51 lakh crore, and Rs.1.69 lakh crore respectively.

[With Inputs from IANS]

PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views

For all the latest updates, download PGurus App.