Saturday, 20 Jul, 2024
Economy 02-Jul, 2024

GST collection in June rises 7.7% to 1.74 lakh crore: Finance Ministry stops monthly data release

By: Team India Tracker

GST collection in June rises 7.7% to 1.74 lakh crore: Finance Ministry stops monthly data release

The monthly GST collection data has not been released since, and no explanation has been provided. Image Source: IANS

Although June's collection increased by 8 percent annually, it increased marginally month over month.

According to the official sources, the GST collection in June touched Rs 1.74 lakh crore, registering an 8 percent year-on-year growth. The Finance Ministry would no longer be providing comprehensive data on GST collection on the first of each month. The duration of this practice was 74 months. The monthly GST collection data has not been released since, and no explanation has been provided. It's interesting to note that the decision to withhold monthly statistics was made seven years after the Central and State governments merged 17 levies and 13 cesses to create the new indirect tax structure.

Although June's collection increased by 8 percent annually, it increased marginally month over month. May brought in Rs 1.73 lakh crore in revenue. The latest numbers show that Rs 5.57 lakh crore was collected in the first three months of the FY 2024-25. Better consumption and compliance, according to sources, have enhanced the collection.

According to Sanjay Kumar Aggarwal, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), “The GST taxpayer base has increased to 1.46 crore in April 2024 from 1.05 crore as of April 2018. We have witnessed a quantum jump in taxpayers base along with improved compliance.”

The Ministry provided comparison charts of the pre- and post-GST tax rates on household goods and stated that the adoption of the GST has made living easier for all households since they have spent less on food and mass-consumption items.

Following the adoption of the GST, food commodities such as unpackaged wheat, rice, curd, and lassi, which were formerly subject to a tax rate of 2.5–4 percent, now have a zero percent tax rate. Under the GST regime, household products such as cosmetics, watches, hygienic plastic ware, doors and windows, furniture, and mattresses are subject to a lower tax rate of 18 percent, which is lower than the previous excise and VAT regime's rate of 28 percent.

Source: Ministry of Finance

While the data for central and state GST collections was not released by the Ministry, and official source stated that about Rs 39,600 crore had been settled to the central GST account from Integrated GST (IGST) collections, while States had been given Rs 33,548 crore from the IGST pool.

The introduction and implementation of Goods and Service Tax marked was a turning point in India’s history of taxation. In a diverse and federal nation like India, where many tax laws were unified into a single system, the adoption of this complete system was especially noteworthy. Gross GST collection from April to March 2023-24 increased by an impressive 13 percent year over year to Rs 18.40 lakh crore. For FY 2023–2024, the average monthly gross collection is Rs 1.68 lakh crore, which is more than the Rs 1.5 lakh crore received in the equivalent period of the previous year.

The GST is a value-added tax applied on the majority of goods and services sold for domestic consumption. Consumers pay the GST, but businesses that provide products and services remit it to the government. GST is levied on the 'supply' of goods or services, as opposed to the prior concept of levy on the manufacture of things, the sale of goods, or the provision of services. The rates of CGST, SGST, and IGST are mutually agreed upon by the Centre and the States. The rates are announced based on the GST Council's suggestion. In May 2015, the GST (122nd Constitutional Amendment) Bill, 2014 was enacted. It was enacted as the Constitution (101st Amendment) Act, 2016, and went into force on September 16, 2016. The GST was implemented on July 1, 2017.

The highest ever GST collection was recorded in April 2024 at Rs 2,10,267 crore. The GST revenue collection was lowest in June 2021 at Rs. 92,800 crore

Saurabh Agarwal, Tax Partner at EY India said, “This robust performance reflects a buoyant economy, with businesses demonstrating commendable self-compliance. Timely audits, scrutiny measures, and effective enforcement by the department have all contributed to this success. The significant surge in collections also raises expectations for the next wave of GST reforms. These reforms could potentially address working capital blockages, streamline tax rates, ease ITC restrictions, and implement sector-specific solutions to tackle existing challenges.”