December GST collections rise 7.3% YoY to Rs 1.77 lakh crore

December GST collections rise 7.3% YoY to Rs 1.77 lakh crore

Goods and Services Tax collections rose to Rs 1.77 lakh crore in December, staying above the Rs 1.7 lakh crore mark for a tenth consecutive month, data released on January 1 showed.

Tax collections were 7.3 percent higher than in December 2023, when they stood at Rs 1.65 lakh crore, but were lower than the Rs 2.1 lakh crore mark hit in April. The pace of growth was also the slowest in three months.

"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 slight decrease in consumer spending over past few months," said Saurabh Agarwal, Tax Partner, EY India.

However, GST collections have been better than the previous quarter.

GST collections averaged Rs 1.82 lakh crore in the October-December period compared with Rs 1.77 lakh crore in the previous quarter. In the December quarter GST collections were 8.3 percent higher than the previous year.

A rise in GST revenues indicates a better economic performance than the previous quarter.

The Indian economy faltered in the second quarter as growth slumped to a seven quarter low of 5.4 percent from 6.7 percent in the April-June period. RBI expects the economy to grow 6.6 percent in FY25.

Net GST revenue was just 3.3 percent higher compared with the previous year at Rs 1.54 lakh crore, with import refunds rising faster than domestic refunds.

The net domestic revenue rose 6.7 percent to Rs 1.21 lakh crore, while net customs revenue had declined 7.3 percent compared with the previous year.

Domestic refunds rose 31 percent over the previous year, while the corresponding rise in import refunds was 64.5 percent.

Experts indicate that this may be supportive of government's push for Atmarnirbhar Bharat.

"These trends support the government's initiative to make India self-reliant ('Atmanirbhar Bharat'). This focus on domestic production and reduced reliance on imports is essential for the long-term sustainable growth of the Indian economy," Agarwal added.