News

Published: August 2, 2024
Updated: August 2, 2024

GST Collections Rise to ₹1.82 Trillion in July 2024, Up 10.3% YoY

Monthly Revenue Overview

In July 2024, the central and state governments collected ₹1.82 trillion in goods and services tax (GST), marking a significant 10.3% increase compared to the same period last year. This figure is also higher than the ₹1.74 trillion collected in June 2024, according to data released by the finance ministry.

Comparative Analysis

While July's GST collections did not surpass the record ₹2.1 trillion collected in April, they align with expectations of robust GST revenue receipts. Experts anticipate further increases as the festive season approaches. July's GST figures represent sales from June, which is typically a slower month before the onset of festivities.

Expert Insights

“A 10%-plus growth in collections for this year compared to last year aligns well with expectations and depicts signs of stability and maturity of GST implementation in India. With festivities coming up in the next few months, the collections should witness a further increase.

Net Collections and Refunds

Net GST collections, after accounting for refunds of ₹16,283 crore, rose by 14.4% for the month, despite refunds being 19.4% lower compared to the same month last year. Maharashtra, Uttar Pradesh, Karnataka, and Tamil Nadu emerged as the largest collectors of GST by value.

State-Wise Divergence

“There appears to be a wide divergence in collections growth compared with the same month last year across states even among the large manufacturing and consuming states. While Maharashtra, Gujarat, and Karnataka have shown 11-13% growth, Tamil Nadu, Andhra Pradesh, and Uttar Pradesh are in the range of -7% to 5%,” according to analysts.. This divergence suggests the need for further evaluation based on sectoral data for these states.

Growth in Developing Regions

The highest growth was observed in Nagaland, Manipur, Andaman and Nicobar, and Ladakh, albeit on a low base. “The surge in tax collections from these regions suggests heightened economic activity and consumption in these developing parts of India

Seasonal Impact

"Further, a potential stagnation or decline in collections during August (compared to July) is anticipated due to the monsoon season's impact on overall economic momentum

Yearly Performance and Forecast

From April to July 2024, gross GST collections stood at ₹7.38 trillion, up 10.2% from ₹6.70 trillion in the same period last year. GST collections have steadily risen since their inception in FY18, with increasing compliance and more businesses entering the formal sector. Gross GST collections have nearly tripled from ₹7.41 trillion in FY18 to ₹20.18 trillion in FY24.

Manufacturing Activity

India’s manufacturing activity remained steady in July, driven by new orders leading to higher output. The HSBC final India Manufacturing Purchasing Managers Index (PMI), compiled by S&P Global, stood at 58.1 in July, slightly down from 58.3 in June.

The steady rise in GST collections reflects the growing compliance and formalization of businesses in India. With the upcoming festive season, collections are expected to increase further, reinforcing the positive trend seen in recent years. The finance ministry forecasts central GST revenue, including cess, to reach ₹10.62 trillion for FY25, higher than the revised estimates of ₹9.56 trillion for FY24.