Goods and Services Tax (GST) collection in the current financial year ending March 31 is expected to surpass the ₹20 lakh crore mark with an annualised growth of approximately 12%, two officials aware of the development said, attributing the increase to heightened economic activity and ease of compliance driven by technology.
Robust collections are also expected for GST cess in the 2023-24 period, with total revenue under the component likely to be around ₹1.45 lakh crore, the officials added. This increases the probability that it could be rolled back sooner than the March 31, 2026 deadline set initially.
The government extended the GST cess, which is levied on luxury items and so-called sin goods such as automobiles, liquor, cigarettes, aerated water and coal, up to March 31, 2026 to retire the ₹2.69 lakh crore debt taken to compensate states for their revenue shortfall during the pandemic years. “Cess will cease to exist even before the deadline if the principal and interest amounts are paid early,” one of the officials cited above said.
HT first reported the possibility of an early end to the GST cess on March 20. In the last financial year, the GST collection was a little over ₹18 lakh crore while the year before that, it was ₹14.83 lakh crore.
The data up to the last week show that GST collections in the month of March 2024 may significantly exceed ₹1.60 lakh crore, which will take gross revenues for the entire financial year past the ₹20 lakh crore mark, a second person said. “A final number will, however, be known only after March 31,” he said.
“So far, the average monthly gross collections for 2023-24 is ₹1.67 lakh crore. We expect the same trend to reflect in March numbers. This is also enforced by the e-way bill numbers,” he said. According to official data released on March 1, total gross GST collections in 2023-24 (till February 2024) was ₹18.40 lakh crore, a 11.7% annualised growth. Electronic waybills are a digital compliance mechanism under the GST regime to track movement of goods.
The GST collection data for March 2024 is expected on April 1 as government normally releases the numbers for a month on the first day of the next month. GST revenue figures of a particular month show actual business activities undertaken in the previous month.
GST revenues in February surpassed ₹1.68 lakh with 12.5% year-on-year increase, which was the fourth highest in 79 months since the new tax regime was rolled out on July 1, 2017. In January 2024, it crossed ₹1.74 lakh crore, the second highest ever. Experts said the revenue growth reflected the robust performance of the domestic economy as the GST number is a weathervane of the economic performance.
According to data released by the National Statistical Office (NSO) on February 29, the Indian economy saw an 8.4% growth the third quarter of 2023-24, driven by investment, increased manufacturing and services activities, and an upside in tax revenue. The economy is projected to expand by 7.6% in the current fiscal, faster than the 7.3% forecast made by the first advance estimates on January 5.
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