India’s GST Collections Surge to Six-Month High in October 2024

In October 2024, India’s Goods and Services Tax (GST) collections reached a significant milestone, hitting a six-month high of US$ 22.28 billion (Rs. 1.87 trillion). This marks an 8.1% increase from the previous month, September, and an 8.9% year-on-year rise from US$ 20.49 billion (Rs. 1.72 trillion) recorded in October 2023. The sustained growth in GST collections underscores the resilience of the Indian economy, maintaining monthly collections above the US$ 20.25 billion (Rs. 1.7 trillion) threshold for the eighth consecutive month.

Year-to-Date Growth and Revenue Analysis

For the fiscal year-to-date, gross GST collections from April to October 2024 amounted to US$ 151.48 billion (Rs. 12.74 trillion), reflecting a robust 9.4% increase compared to US$ 138.65 billion (Rs. 11.64 trillion) in the same period last year. This consistent growth trend indicates a stronger economic performance in India, as the country continues to rebound from the impacts of the COVID-19 pandemic and strives to enhance its revenue generation mechanisms.

The net GST revenue, after accounting for refunds, stood at US$ 20 billion (Rs. 1.68 trillion) in October, showcasing a 7.9% growth compared to US$ 18.48 billion (Rs. 1.55 trillion) in October 2023. This upward trend in net revenue signals an increasing compliance level among businesses and a robust economic activity landscape.

Regional Performance Variability

However, revenue growth varied significantly across different regions. Ladakh recorded the highest growth rate at 30%, followed by Kerala at 20% and Haryana at 15%. This divergence in performance underscores the varying economic activities and tax compliance levels across states. In contrast, Arunachal Pradesh and the 'Other Territory' category faced declines of 33% and 37%, respectively, highlighting the challenges some regions face in revenue collection.

Notably, September's GST growth rate was the lowest since the COVID period, registering at 6.5%. The average monthly collections also showed signs of deceleration, with US$ 21.08 billion (Rs. 1.77 trillion) in the second quarter compared to US$ 22.16 billion (Rs. 1.86 trillion) in the first quarter of FY25.

In August, GST collections amounted to US$ 20.85 billion (Rs. 1.75 trillion), with gross domestic revenue rising 5.9% to US$ 15.13 billion (Rs. 1.27 trillion). Revenue from goods imports also saw an 8% increase, reaching US$ 5.41 billion (Rs. 45,390 crore). However, the refunds issued during this period grew significantly by 31% YoY to US$ 2.43 billion (Rs. 20,458 crore), indicating a potential area of concern regarding revenue retention.

Conclusion

Overall, the surge in India's GST collections in October 2024 reflects a positive trajectory for the economy, signaling robust consumer spending and improved tax compliance. The performance across regions highlights the diverse economic conditions within the country, with certain states capitalizing on growth opportunities while others face challenges. As India continues to recover and adapt post-pandemic, sustained monitoring of GST collections will be crucial for understanding broader economic health and formulating effective fiscal policies.

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