Highlighting continued hectic activity in the Indian economy, gross goods and services tax (GST) collection grew 12.54 per cent year-on-year to Rs 1.68 trillion in February. Positive consumer sentiment was also palpable through the monthly sales figures for cars and two-wheelers as both segments witnessed an annual uptick.
Car sales in the wholesale market last month stood at 373,177 units, up 11 per cent Y-o-Y and were the highest for the second month of any calendar year and the third highest ever.
The manufacturing sector, too, gathered momentum in February on the back of expansion in new export orders and easing of pricing pressures. The headline Purchasing Managers Index (PMI) climbed toa five-month high of 56.9 against 56.5 in January, the survey released by HSBC on Friday showed.
But after hitting record highs in January, unified payment interface (UPI) transactions witnessed a marginal dip in both value and volume terms last month. They fell 0.7 per cent and 0.8 per cent respectively, compared to January. In value terms, transactions were seen at Rs 18.28 trillion, while in volume terms, they were at 12.10 billion.
Continuing the robust tax collection trend, net GST revenue (after refunds) rose 13.6 per cent Y-o-Y to Rs 1.51 trillion in February. The net GST revenue for the first 11 months of FY24 now stands at Rs 16.36 trillion, up 13 per cent Y-o-Y. On a gross basis, this number stands at Rs 18.39 trillion, up 11.7 per cent over the past year.
However, gross GST receipts (before refunds) last month moderated compared to the Rs 1.74 trillion mop-up in January. This month-on-month decline was largely due to February having two fewer days than January.
Barring May and August 2023, monthly gross GST collection has been over Rs 1.6 trillion during FY24, so far. The average monthly gross GST mop-up now stands at Rs 1.67 trillion during 11MFY24, exceeding the Rs 1.5 trillion average collection in the previous year’s corresponding period.
Gross GST growth last month was driven by a 13.9 per cent increase in collections from domestic transactions and an 8.5 per cent jump from import of goods.
“Overall, the GST revenue figures demonstrate continued growth momentum and positive performance,” the finance ministry said in a statement.
Robust net indirect taxes (net of subsidies) played a crucial role in pushing up the projected gross domestic product (GDP) growth figure to 7.6 per cent for FY24 in the second advance estimates, against 7.3 per cent in the first advance estimates.
After the settlement of the integrated GST (IGST), Rs 73,641 crore came to the central kitty and Rs 75,569 crore entered to state coffers.
Amit Maheshwari, tax partner at AKM Global, attributed the robust GSTcollection in February to economic growth, enhanced compliance measures, a broadened tax base, potential adjustments in GST rates, sectoral expansion, improved data analytics, and significant recoveries by the authorities.
Abhishek Jain, partner at KPMG, said healthy GST collections have added to the cheer of 8.4 per cent GDP growth in the third quarter of FY’24.
However, Bihar and Jharkhand witnessed a decline in GST collection by 1 per cent each Y-o-Y at Rs 1,491 crore and Rs 2,933 crore, respectively, in February. Three north-eastern states — Nagaland, Manipur and Mizoram — and Union Territory of Lakshadweep also saw a fall in GST receipts last month on a Y-o-Y basis.
After IGST settlement, Manipur, Dadra and Nagar Haveli, Daman and Diu recorded a fall in GST collections during April-February this financial year.
Uttar Pradesh, Arunachal Pradesh, Assam, Odisha, Chhattisgarh, Madhya Pradesh, Goa, and Union Territories of Lakshadweep, Puducherry, and Ladakh registered at least 15 per cent rise in GST collections after IGST settlement during the first 11 months of the current financial year.
Saurabh Agarwal, tax partner at EY, said the rise in GST mop-up from relatively small states and Union Territories such as Assam and Ladakh suggests that economic growth is becoming widespread and inclusive across the country.
The finance ministry generally releases GST figures before refunds but it on Friday also gave the gst numbers net of refunds for February and the first 11 months of the current financial year.
First Published: Mar 01 2024 | 9:16 PM IST
