GST collections grew 7.3% to Rs 1,76,857 crore in Dec, amid a slowdown in demand in several segments of the economy and concerns over weak urban demand.
Domestic collections in Dec (based on transactions in the previous month) grew 8.4% to Rs 1,32,589 crore, while those related to imports were 3.9%. The good news was that govt did not hesitate from issuing refunds, resulting in a 45% jump to Rs 22,490 crore. As a result, collections on a net basis were estimated to be 6.7% higher.
“India’s recent GST collections have slowed down slightly, which is typical after the holiday season. It’s well in line with expectations as we have been witnessing a slight decrease in consumer spending over the past few months,” said Saurabh Agarwal, tax partner at EY India, a consulting firm. Arunachal Pradesh (24% fall), Meghalaya (12% decrease), Andhra Pradesh (6% decline) and Puducherry (2% dip) were among the laggards. Sikkim (30% jump), Haryana (28% rise) and Punjab (22% growth) emerged the top performers in Dec but there were some concerns over the performance of some of the large producing and consuming states.
“The below 5% increase in major states like UP, Bihar, WB, Gujarat and MP would be an area of concern for policymakers, who may be considering the sectoral breakdown of the GST collections in these states to understand the reasons for the same,” said M S Mani, a partner at consulting firm Deloitte.
Ahead of the budget, industry has been demanding steps from govt, including reduction in income tax and other incentives to boost demand. The numbers also led to suggestions that the rate rationalisation exercise being undertaken by the GST Council should look at some measures as well. “Given the slowdown in GST collections, it will be interesting to see if govt takes specific measures to boost consumption in the upcoming Budget,” said Pratik Jain, partner at consulting firm PwC.
