Ratio of GST collection to GDP increasing gradually

Much has been reported about the robust goods and services tax (GST) collection.

- INDIVJAL DHASMANA

But its proportion to the size of the economy is only crawling up.

Gross GST collection (before refunds) grew 11.5 per cent to hit the second-highest numbers at 1.78 trillion in March of the last financial year. The highest amount at ₹1.87 trillion was collected in April 2023. Gross GST collection touched ₹20.18 trillion during the entire 2023-24, a growth of 11.7 per cent over ₹18.07 crore during the previous financial year.

While the gross amount seems significant, it was just 6.86 per cent of the GDP at current prices for 2023-24, if Second Advance Estimates of national accounts are considered. It was higher than 6.72 per cent in the previous year, but only moderately. Six years ago in 2018-19, the GST-GDP ratio was 6.23 per cent. As such, the GST receipts in proportion to the size of the economy have only moderately been rising over the years.