ROBUST REVENUES

The GST revenue growth will remain strong but sustaining it may be difficult 

- SURABHI

IT TOOK A little less than seven years since its introduction on July 1, 2017, for the goods and services tax (GST) to cross the ₹2 lakh croremark in April 2024. At ₹2.1 lakh crore, registering a 12.5% growth year-on-year, this was the highest ever monthly collection from the indirect tax levy.

This was more than double the mop up of ₹92,283 crore from GST in its first month of rollout in July 2017. The mop up from GST crossed ₹1 lakh crore for the first time in April 2018, when it amounted to ₹1.03 lakh crore. Over the years, the number of taxpayers under the indirect tax levy has nearly trebled to 14.6 million at present from just 5.95 million when it was launched.

Commenting on the April data, Union Finance Minister Nirmala Sitharaman noted that GST has improved tax buoyancy from 0.72 (pre-GST) to 1.22 (2018-23). “Despite compensation ending, state revenues remain buoyant at 1.15,” she said in a post on X (formerly known as Twitter).

She emphasised that even though the GST rate is lower than the prescribed revenue neutral rate and the impact of Covid-19 has affected revenues, the tax collections (as a percentage of GDP) have now rebounded to pre-GST levels in both net and gross terms.