Gross GST collections up 10% to Rs 1.73 lakh crore in May, growth rate moderates

Gross Goods and Services tax (GST) collections rose 10 per cent year-on-year to Rs 1.73 lakh crore in May (for sales in April), data released by the Finance Ministry on Saturday showed.

The growth rate of GST collections moderated from over 11 per cent year-on-year rate seen during the last three months and is the lowest since June 2021. GST collections had hit a record-high level of Rs 2.10 lakh crore in April (for year-end sales in March).

The rise in GST collections was mainly driven by a “strong increase in domestic transactions”, which increased by 15.3 per cent as against 13.4 per cent growth rate in April. However, the contribution from imports slowed as it contracted 4.3 per cent as against growth of 8.3 per cent seen a month ago. After accounting for refunds, the net GST revenue for May stood at Rs 1.44 lakh crore, up 6.9 per cent year-on-year but lower than Rs 1.92 lakh crore seen in April when it recorded an increase of 15.5 per cent.

Cumulatively, the gross GST collections in FY25 till May stood at Rs 3.83 lakh crore, an increase of 11.3 per cent year-on-year growth, “driven by a strong increase in domestic transactions (up 14.2 per cent) and marginal increase in imports (up 1.4 per cent)”, the Ministry said. After accounting for refunds, the net GST revenue in FY25 till May stood at Rs 3.36 lakh crore, a growth of 11.6 per cent compared to the same period last year.

State-wise data for May showed that out of 38 states/union territories (including Centre’s jurisdiction), 21 states/UTs recorded higher growth in GST collections than the national average of 10 per cent growth rate. In absolute terms, Maharashtra was at the top with collection of Rs 26,854 crore (14 per cent growth), followed by Karnataka with collection of Rs 11,889 crore (15 per cent growth), Gujarat with collection of Rs 11,325 crore (16 per cent growth), Tamil Nadu with Rs 9,768 crore (9 per cent growth) and Haryana with Rs 9,289 crore collection (28 per cent growth).

North-eastern states registered a contraction in GST collections including Sikkim (-7 per cent), Arunachal Pradesh (-18 per cent), Meghalaya (-20 per cent), and Nagaland (-3 per cent). Strife-torn Manipur, however, registered a 48 per cent increase in collections.

Tax experts said though the growth in tax collections has moderated, there is still firm growth from domestic supplies.

“As expected, collections have moderated after the year-end highest collections last month. However, 10 per cent growth over last year in the same month and especially 15.3 per cent growth in GST collections on domestic supplies is impressive and shows the robustness of the domestic economy,” Abhishek Jain, Indirect Tax Head & Partner, KPMG said.

However, the collections may get affected due to the heatwave going ahead. “Increased GST in northern states like Delhi, Uttar Pradesh, etc., might be due to election spending and a surge in purchases of fans, coolers, and ACs caused by the higher temperatures compared to last year. However, a decline from last month’s collections could be due to year-end tax payments in May and potentially stagnant auto sales. 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,” Saurabh Agarwal, Tax Partner, EY said.

Overall, the total GST collections stood at Rs 1,72,739 crore in May, out of which Central GST (CGST) — the tax levied on intra-state supplies of goods and services by the Centre — was Rs 32,409 crore, State GST (SGST) — the tax levied on intra-state supplies of goods and services by the states — was Rs 40,265 crore, IGST was Rs 87,781 crore (including Rs 39,879 crore collected on import of goods) and cess was Rs 12,284 crore (including Rs 1,076 crore collected on import of goods).

In May, the government settled Rs 38,519 crore to CGST and Rs 32,733 crore to SGST from the net IGST collection of Rs 67,204 crore. As a result, the total revenue for the month post settlement was Rs 70,928 crore for CGST and Rs 72,999 crore for SGST.