According to data issued by the Finance Ministry on Saturday, gross goods and services tax (GST) receipts increased by 10% year over year to Rs 1.73 lakh crore in May (for sales in April). The growth rate of GST revenues has reached its lowest point since June 2021 after slowing down from over 11% year over year during the previous three months. In April, GST receipts reached a record-breaking amount of Rs 2.10 lakh crore (for sales that ended in March).
A “strong increase in domestic transactions” contributed significantly to the increase in GST revenues, rising by 15.3% compared to April’s growth rate of 13.4%. On the other hand, imports’ contribution decreased, falling 4.3% from a month before when it had grown by 8.3%. Refunds included, the net GST revenue for May was Rs 1.44 lakh crore, up 6.9% year over year but less than the Rs 1.92 lakh crore observed in April, when it saw a 15.5% increase.
The Ministry reported that the gross GST revenues for FY25 up to May were Rs 3.83 lakh crore, representing a year-over-year jump of 11.3%. The increase was primarily attributed to a 14.2% increase in domestic transactions and a 1.4% increase in imports. Net GST revenue for FY25 through May, after refunds were taken into account, was Rs 3.36 lakh crore, an increase of 11.6% over the same time the previous year.
According to state-by-state figures for May, 21 of the 38 states and union territories (including the jurisdiction of the Center) had higher growth rates in their GST collections than the 10% growth rate that was averaged across the nation. Maharashtra was the highest-earning state in absolute terms, with Rs 26,854 crore (a growth of 14%), followed by Karnataka with Rs 11,889 crore (a growth of 15%), Gujarat with Rs 11,325 crore (a growth of 16%), Tamil Nadu with Rs 9,768 crore (a growth of 9%), and Haryana with Rs 9,289 crore (a growth of 28%).
Some states in the northeast, such as Sikkim (-7%) Arunachal Pradesh (18%) Meghalaya (20%) and Nagaland (-3%) saw a decline in their GST collections. Manipur, which has been ravaged by violence, saw a 48% rise in collections.
Even while the growth in tax revenues has slowed, domestic supply growth is still robust, according to tax specialists.
Following last month’s record-breaking year-end collections, collections have steadily decreased as anticipated. Nonetheless, the 10% increase from the previous year in the same month, and particularly the 15.3% increase in GST receipts on domestic supply, are remarkable and demonstrate the strength of the home sector. remarked Abhishek Jain, Partner & Head of Indirect Tax at KPMG.
However, the impending temperatures can have an impact on the collections. The higher sales of fans, coolers, and air conditioners brought on by the warmer weather than in previous year, along with election-related expenditures, may be the source of the increased GST in northern states like Delhi, Uttar Pradesh, etc. On the other hand, a drop in revenue from the previous month can be brought on by May’s year-end tax payments as well as possibly flat auto sales. According to Saurabh Agarwal, Tax Partner at EY, “the combination of summer heatwaves and lower auto sales might lead to flat or lower GST collections in June 2024 compared to April’s peak.”
In May, the total amount of GST collected was Rs 1,72,739 crore. Of this, Rs 32,409 crore was collected from the Central Government as the Central GST (CGST), Rs 40,265 crore was collected from the States as the State GST (SGST), Rs 87,781 crore (including Rs 39,879 crore collected on goods import), and Rs 12,284 crore (including Rs 1,076 crore collected on import of goods) were collected as the IGST.
From the net IGST collection of Rs 67,204 crore, the government settled Rs 38,519 crore to CGST and Rs 32,733 crore to SGST in May. Consequently, after settlement, the total revenue for the month was Rs 72,999 crore for SGST and Rs 70,928 crore for CGST.