May 2024 GST Revenue Climbs to $20.82 Billion, Fueled by Strong Domestic Transactions

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GST Revenue for May 2024 Soars by 10%, Driven by Robust Domestic Transactions

Team FS

03/Jun/2024

Key Points:

May 2024 GST revenue stood at $20.82 billion, marking a 10% year-on-year growth.
Domestic transactions surged by 15.3%, while imports saw a decline of 4.3%.
Net GST revenue after refunds for May 2024 was $17.33 billion, reflecting a 6.9% increase compared to the same period last year.

In May 2024, India's gross Goods and Services Tax (GST) revenue hit an impressive $20.82 billion (Rs. 1.73 lakh crore), marking a substantial 10% year-on-year (YoY) growth. This robust increase was primarily driven by a strong rise in domestic transactions, which climbed by 15.3%, and a slowdown in imports, which decreased by 4.3%.

After accounting for refunds, the net GST revenue for May 2024 was $17.33 billion (Rs. 1.44 lakh crore), reflecting a 6.9% growth compared to the same period last year. The detailed breakdown of the May 2024 collections is as follows:

Central GST (CGST): $3.90 billion (Rs. 32,409 crore)
State GST (SGST): $4.85 billion (Rs. 40,265 crore)
Integrated GST (IGST): $10.57 billion (Rs. 87,781 crore) (including $4.80 billion (Rs. 39,879 crore) from imported goods)
Cess: $1.48 billion (Rs. 12,284 crore) (including $0.13 billion (Rs. 1,076 crore) from imported goods)

For the financial year 2024-2025 up to May 2024, the gross GST collections totaled $46.10 billion (Rs. 3.83 lakh crore), representing an 11.3% YoY growth. This growth was fueled by a significant increase in domestic transactions, which were up by 14.2%, and a marginal rise in imports, which increased by 1.4%.

After refunds, the net GST revenue for FY24-25 till May 2024 stood at $40.44 billion (Rs. 3.36 lakh crore), reflecting an 11.6% growth compared to the same period last year. The detailed breakdown of collections for FY24-25 till May 2024 is as follows:

Central GST (CGST): $9.18 billion (Rs. 76,255 crore)
State GST (SGST): $11.29 billion (Rs. 93,804 crore)
Integrated GST (IGST): $22.56 billion (Rs. 1,87,404 crore) (including $9.35 billion (Rs. 77,706 crore) from imported goods)
Cess: $3.07 billion (Rs. 25,544 crore) (including $0.25 billion (Rs. 2,084 crore) from imported goods)

Key Drivers of GST Revenue Growth

The impressive growth in GST revenue for May 2024 can be attributed to several factors:

Strong Domestic Transactions: Domestic transactions showed a significant increase of 15.3%, underscoring the resilience and growth of the domestic economy. This rise indicates heightened economic activity and consumer spending within the country.
Decline in Imports: A 4.3% decline in imports contributed to the overall GST revenue. This slowdown in imports could be indicative of a shift towards domestically produced goods or changes in global trade dynamics affecting import volumes.
Effective Tax Collection and Compliance: Improved compliance and efficient tax collection mechanisms have played a crucial role in boosting GST revenues. The government's efforts to streamline GST processes and reduce evasion have started yielding positive results.

Sectoral Contributions and Implications

The detailed breakdown of GST collections highlights the contributions from various sectors:

Central GST (CGST) and State GST (SGST): These components together contributed a substantial portion of the total GST revenue, reflecting balanced contributions from both central and state levels.
Integrated GST (IGST): A significant part of the IGST collections came from imported goods, highlighting the importance of imports in the overall tax revenue structure.
Cess: The cess collections, including those from imported goods, also contributed notably to the total revenue, indicating its role in specific sectors such as luxury and sin goods.

Future Outlook

The continued growth in GST collections is a positive sign for India's economic health. The strong performance in domestic transactions, coupled with effective tax collection strategies, sets a promising tone for the rest of the financial year. As the government continues to focus on improving compliance and expanding the tax base, the GST revenue is expected to maintain its upward trajectory, further supporting the nation's economic development goals.

Overall, the GST revenue data for May 2024 and the fiscal year up to this point underscores the resilience of the Indian economy and the effectiveness of the GST system in capturing a broad spectrum of economic activities. The sustained growth in revenue collections is likely to provide the government with the necessary fiscal space to continue its developmental and infrastructural initiatives, fostering long-term economic growth.

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GST Revenue for May 2024 Soars by 10%, Driven by Robust Domestic Transactions

Key Drivers of GST Revenue Growth

Sectoral Contributions and Implications

Future Outlook

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