Net GST revenue rises 18.1% to ₹1.77 trn in September, fastest in 6 months | Economy & Policy News

Net Goods and Services Tax (GST) revenue, after accounting for refunds, rose 18.1 per cent year-on-year to Rs 1.77 trillion in September, marking the fastest growth in net collections in the past six months, according to provisional data released by the finance ministry on Thursday.

 

The latest increase takes the growth in net GST revenue to around 14 per cent in the July-September quarter, compared with around 7 per cent in the April-June quarter. Net collections had grown 15.8 per cent in July and 8.3 per cent in August.

 

The stronger net revenue growth came alongside a 14.7 per cent increase in gross GST collections to Rs 2.04 trillion in September. Gross collections crossed the Rs 2-trillion mark for the third time in six months, after touching Rs 2.43 trillion in April and Rs 2.11 trillion in July.

  

The rise in gross collections was driven by a 10.1 per cent increase in domestic GST revenue to Rs 1.38 trillion, while GST revenue from imports rose 25.9 per cent to Rs 65,525 crore.

 

After accounting for refunds, net domestic GST revenue increased 13.5 per cent to Rs 1.24 trillion, while net GST revenue from imports rose 30.8 per cent to Rs 52,028 crore.

 

Total refunds stood at Rs 27,001 crore in September, 3 per cent lower than Rs 27,848 crore a year ago. Domestic refunds declined 13.5 per cent to Rs 13,504 crore, while refunds related to exports through ICEGATE increased 10.2 per cent to Rs 13,497 crore.

 

Exporters can claim refunds of taxes paid on inputs and input services used for exports, subject to applicable GST provisions. Domestic suppliers can also claim refunds of unutilised input tax credit in specified cases, including exports and supplies attracting an inverted duty structure.

 

“The Rs 2 lakh crore mark in gross GST collections, with growth of close to 15 per cent, shows that domestic demand continues to do well despite global pressures. The growth is broad-based, with Uttar Pradesh, Telangana, Gujarat and Karnataka each recording growth of 16-18 per cent,” said Saurabh Agarwal, tax partner, EY India.

 

Agarwal said GST on imports was growing much faster than domestic collections, suggesting a need to recalibrate some production-linked incentive schemes so that the gains from the groundwork laid for domestic manufacturing are fully realised.

 

Abhishek Jain, indirect tax head & partner, KPMG, said, “Gross GST collections growing 14.7 per cent in September despite global headwinds is very encouraging. As import GST is up nearly 26 per cent, it’s important to see how much of that is raw materials versus finished goods. It’ll be good to analyse this in detail, specifically if it signals already stronger domestic manufacturing or there is a need for further push, thereby making stronger the case for continuing and expanding schemes like production-linked incentive (PLI).”

 

The sustained growth in collections comes as industry expectations from the next phase of GST 2.0 increasingly centre on process rationalisation, alongside the rate rationalisation undertaken by the government.

 

“The industry’s expectation, therefore, is that the next phase of GST 2.0 should complement the gains from rate rationalisation with ‘process rationalisation’ — making it easier for businesses to claim legitimate credits, obtain refunds, comply with the law and resolve disputes,” said Mahesh Jaising, leader, indirect tax, Deloitte.

 

Key priorities include rationalising input tax credit restrictions and addressing procedural issues that result in legitimate credits being blocked, resolving inverted duty structures and simplifying refund processes to improve business cash flows, Jaising said.

 

There is also a need for greater certainty on cross-border services, particularly for India’s growing services and global capability centre ecosystem, alongside rationalisation of legacy compliance requirements and greater consistency in tax administration and dispute resolution, he said.

 

Greater use of technology and data analytics to enable a more risk-based compliance framework is also expected to remain in focus, with the objective of reducing avoidable reporting and compliance burdens for compliant taxpayers, Jaising added.

 

For the April-September period, gross GST revenue rose 11.6 per cent to Rs 12.46 trillion, while net GST revenue increased 10.4 per cent to Rs 10.66 trillion, compared with Rs 11.17 trillion and Rs 9.65 trillion, respectively, in the corresponding period last year.