GST Collection Shows Strong Yearly Growth Despite Monthly Fluctuations

Economic experts highlight the importance of contextual analysis amidst August's GST collection's monthly dip, emphasizing buoyancy in tax revenues and consistent yearly growth. Despite increased refunds, gross GST collections indicate robust economic health, with a notable 10% rise compared to August 2023.

The Goods and Services Tax (GST) collection for August 2024 demonstrated a strong yearly growth despite a month-on-month decline, with economic experts urging a more contextual analysis of the numbers. The August GST revenue stood at Rs 1,74,962 crore, a 10 percent rise from Rs 1,59,069 crore collected in August 2023.

'The month-on-month decline shouldn't overshadow the buoyancy in both direct and indirect taxes, as well as the historical growth since GST's inception,' said Manoranjan Sharma, Chief Economist at Informerics Ratings. He emphasized that the consistently rising base makes it challenging to maintain high growth rates continuously.

Experts noted that the drop in net GST revenue in August is partly due to increased refunds. Saurabh Agarwal, Tax Partner at EY, pointed out that the growth in gross collections reflects a robust economy. The government's efforts to rationalize tax rates and reduce working capital costs for businesses are evident through higher domestic GST refunds and positive growth in regions like Nagaland, Assam, and Ladakh.

(With inputs from agencies.)