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In a significant development, Goods and Services Tax (GST) revenues for February have soared to Rs.1.68 lakh crore, marking a substantial 12.5% year-on-year increase. This surge positions February as the fourth-highest collection month in 79 months since the implementation of the GST regime in July 2017. The remarkable uptick underscores the robust growth of the Indian economy and showcases improved tax compliance measures.
Driving Factors Behind Growth
According to the Union finance ministry, this growth is attributed to a 13.9% rise in GST from domestic transactions and an 8.5% increase in GST from the import of goods.
Gross GST revenues for February totaled ₹1,68,337 crore, with GST revenue net of refunds standing at Rs.1.51 lakh crore, reflecting a notable 13.6% growth on an annualized basis.
Consistent Performance and Fiscal Projections
The data released on Friday also upwardly revised the gross revenue of the previous month (January) to Rs.1,74,106 crore from Rs.1,72,129 crore, showcasing a steady trajectory in GST revenues. Throughout the fiscal year 2023-24, GST revenues have demonstrated consistent performance, with an average monthly collection of Rs.1.67 lakh crore, significantly surpassing the figures from the previous fiscal year.
Expert Insights and Economic Outlook
Deloitte India partner MS Mani emphasized that the impressive GST collections align with the robust gross domestic product (GDP) numbers for the third quarter, which stood at 8.4%. This reflects a broad-based increase in consumption across sectors, positioning the economy for accelerated growth. Furthermore, the second advance estimates released by the National Statistical Office (NSO) projected a robust 8.4% growth in the Indian economy for the third quarter of 2023-24, outpacing earlier forecasts.
Regional Disparities and Inclusive Growth
Despite the overall growth in GST revenues, there were mixed trends among states in February 2024. While major states such as Maharashtra, Gujarat, Karnataka, Tamil Nadu, and Haryana witnessed double-digit year-on-year growth, some states experienced contractions.
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However, Saurabh Agarwal, tax Partner at EY, highlighted a promising trend of rising GST collections from smaller states and union territories, indicating a more inclusive and widespread economic growth pattern.
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