GST collection expected to cross Rs. 20 lakh-crore in FY 23

The GST collection data for March 2024 is expected on- April 1 as per the government normally releases the numbers for a month on the first day of the next month. GST collection in the running Financial Year ending March 31 is expected to surpass Rs. 20 lakh crore mark with an annualised growth of approximately 12%, officials are aware of the development said, assigning the enhancement to heightened economic activity and ease of compliance due to technology.

Net Revenue-

Strong collections are also expected for GST cess in 2023-24 period, with net revenue under the component likely to be around Rs.1.45 lakh crore, the officials said further. This increase the possibility that it could be rolled back sooner than the March 31, 2026 deadline.

Government has extended GST cess, which is levied on luxury items & so called sin products such as automobiles, liquor, cigarettes, aerated water and coal up to March 31, 2026 to end the Rs. 2.69 lakh crore debt taken to compensate states for their revenue shortfall during the Covid times.

Cess will come to halt to exist even before the deadline if the principal and interest amounts are paid early.

The data till last week shows that GST collections in the month of March 2024 may exceed Rs. 1.60 lakh crore, which will take net revenues for the entire FY past the Rs. 20 lakh crore mark, final number will be known only after Mar 31, as per the other expert said.

The average monthly net collections for 23-24 is Rs. 1.67 lakh crore. We expect the same trend to reflect in March numbers. This is also enforced by e-way bill numbers, expert said.

As per the official data released on March 1, net gross GST collections till Feb 2024 was Rs.18.40 lakh crore, 11.7% annualised growth. E-way bills are digital compliance mechanism under GST regime to track movement of products.

Revenues in February exceeded Rs. 1.68 lakh with 12.5% per year increase, which was the fourth highest in 79 months since the new tax regime was rolled out on July 1, 2017.

In Jan 2024, it crossed Rs. 1.74 lakh crore, which is the second highest. According to experts the revenue growth reflected the strong performance of the domestic economy as the GST number is weathervane of the economy.

As the National Statistical Office (NSO) released the data on Feb 29, the Indian economy saw 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 hiked to expand by 7.6% in the current fiscal, which is faster than the 7.3% forecast made by the first advance expected on Jan 5.