GST Collections Rise 10% to ₹1.75 Lakh Crore in August

India's goods and services tax (GST) collections, a key indicator of domestic consumption, rose by approximately 10% to ₹1.75 lakh crore in August. This increase follows a slightly higher collection of ₹1.82 lakh crore in July. Despite the marginal dip from the previous month, experts anticipate a further boost in collections with the onset of the festive season.

August's GST collection represents a significant increase from ₹1.59 lakh crore recorded in the same month last year. Abhishek Jain, Indirect Tax Head & Partner at KPMG, notes that GST collections have stabilized around ₹1.75 lakh crore. With major festivals like Ganesh Chaturthi starting this weekend, the coming months are expected to see a further rise in collections.

Large states such as Maharashtra, Karnataka, Uttar Pradesh, Madhya Pradesh, and Haryana have reported double-digit growth in GST collections, reflecting strong consumption and effective tax compliance measures. MS Mani, Partner at Deloitte, attributes this growth to enhanced compliance and anti-evasion efforts by tax authorities.

The increase in GST revenue can also be linked to ongoing audits and investigations which boost compliance. Domestic GST revenue grew by 9.2% to about ₹1.25 lakh crore, while import GST revenue surged by 12.1% to ₹49,976 crore. The rise in import revenue indicates robust external sector performance and strong domestic collections affirm continued economic momentum, according to Mahesh Jaising, Partner and Leader, of Indirect Tax at Deloitte.

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The Centre issued refunds totalling ₹24,460 crore in August, a 38% increase from last year, aimed at alleviating working capital costs for businesses. This is part of the government's broader efforts to support businesses facing inverted duty structures, as noted by Saurabh Agarwal, Tax Partner at EY. After accounting for refunds, net GST revenue increased by 6.5% to ₹1.5 lakh crore.

The upcoming GST Council meeting on September 9 is anticipated to further refine the tax structure, with potential changes to ease of doing business.

[Disclaimer: The data presented in this blog is based on current figures and expert opinions. The actual GST collections and economic impact may vary.]