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GST Collections Update: Trends, Slowdown, nd Fiscal Outlook



  Oct 07, 2023

Revenue Riddles in India's GST Collections


Q: What is the overall trend in GST collections?

A: GST collections stand at over ₹9.92 lakh crore halfway through the financial year, marking an 11.1% increase over the same period last year. The average monthly revenue is ₹1,65,418 crore.
 

Q: Is there a slowdown in GST inflows?

A: Yes, the growth rate dropped to 10.2% in September, the slowest since July 2021. The average growth also dipped to 10.6% in Q2 from 11.5% in Q1.
 

Q: What impact did compliance measures have?

A: E-invoicing became mandatory for firms with a turnover over ₹5 crore, and pending dues since 2017-18 were included in September's revenue. These factors need to be isolated to understand actual growth.
 

Q: What about e-way bills?

A: A record 9.34 crore e-way bills were generated in August, but this didn't translate into the highest-ever revenues, suggesting transaction sizes may have shrunk.
 

Q: Are there inconsistencies in goods import revenues?

A: Yes, despite imports hitting a nine-month high in August, revenues collected in September were 5.7% below the previous month, indicating possible revenue leakages that need investigation.
 

Q: What is the fiscal outlook?

A: The government appears comfortably placed with GST revenues, even with expected moderation in inflows during Q1 2024 when GDP growth is expected to slow.
 

Q: What's next for policymakers?

A: The GST Council is convening to scrutinize these trends and areas of concern more closely.
 

Q: What is the broader economic context?

A: The central bank expects real GDP growth to slow to 5.7% in Q1 2024 from 7.8% in the first quarter of the fiscal year.


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