Gross Goods and Services Tax (GST) collections rose 7.5 per cent year-on-year to Rs 1.96 lakh crore in July (for sales in June), data released by the government on Friday showed. Even though the pace of growth in gross GST collections picked up to 7.5 per cent in July from 6.2 per cent, this is the second consecutive month wherein the growth rate has been in single digits and much lower after posting double-digit growth in the first two months of the ongoing financial year.
Net GST collections, after accounting for refunds, took a hit by growing by just 1.7 per cent to Rs 1.69 lakh crore in July as refunds jumped sharply by 66.8 per cent, the data showed. In the previous month, net GST collections had risen 3.3 per cent.
Total refunds stood at Rs 27,147 crore in July, sharply up by 66.8 per cent YoY. While domestic refunds grew 117.6 per cent YoY to Rs 16,983 crore in July, refunds for imports were up 20 per cent to Rs 10,164 crore.
In June, total refunds had risen 28.4 per cent to Rs 25,491 crore, with domestic refunds rising 14.1 per cent YoY to Rs 12,643 crore, while refunds on imports rose 46.4 per cent YoY to Rs 12,848 crore.
The trend of slower growth was also visible in GST collections on the imports front as they increased sequentially but the pace of year-on-year growth slowed down in July. GST collections from imports rose 9.7 per cent year-on-year to Rs 52,712 crore in July as against 11.4 per cent growth seen in June at Rs 45,690 crore.
The revenue collections were better on the domestic front, with GST collections rising 6.7 per cent to Rs 1.43 lakh crore in July, up from 4.6 per cent growth at Rs 1.39 lakh crore in the previous month.
What experts are saying
Experts said the muted growth in net revenue is mainly due to a pickup in GST refunds. MS Mani, Partner, Deloitte India, said, “While GST revenues for the past few months have been on an upward trajectory, the muted increase of 1.7 per cent in the net GST collections for the month and 8.4 per cent during this year can be attributed to the increased refunds. During the month, domestic refunds have more than doubled compared to the same month last year and during the current year refunds have increased by 46 per cent. This increase in refunds augers well for businesses as it indicates stability in the online refund processes and quicker refund sanctions,” he said.
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Abhishek Jain, indirect tax head and partner, KPMG said, “Higher refunds on domestic supplies could be from excess tax payments, inverted duty structures, and other adjustments. The increased refunds should aid cash flows for businesses.”
State-wise GST collections in July
State-wise data for July showed that out of 38 states/Union territories, 20 states/UTs recorded higher growth in gross GST collections than the national average of 7.5 per cent growth rate.
In absolute terms, Maharashtra was at the top with collection of Rs 30,590 crore (6 per cent growth), followed by Karnataka with collection of Rs 13,967 crore (7 per cent growth), Gujarat with collection of Rs 11,358 crore (3 per cent growth), and Tamil Nadu with Rs 11,296 crore (8 per cent growth).
States/UTs which recorded a contraction in GST collections in July included: Jammu & Kashmir at Rs 599 crore (-5 per cent), Chandigarh at Rs 221 crore (-5 per cent), Manipur at Rs 43 crore (-36 per cent), Mizoram at Rs 31 crore (-21 per cent) and Jharkhand at Rs 3,040 crore (-3 per cent).
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The gross Central GST (CGST) — the tax levied on intra-state supplies of goods and services by the Centre — collections stood at Rs 35,470 crore, State GST (SGST) — the tax levied on intra-state supplies of goods and services by the states — collections were Rs 44,059 crore, while Integrated GST (IGST) — the tax levied on all inter-state supplies of goods and services — collections stood at Rs 1.04 lakh crore and cess at Rs 12,670 crore during the month.
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