GST collections in line with expectations, say economists

GST collections for November 2022 showed a dip as they stood at Rs 1.46 lakh crore, down by 3.9 per cent compared to Rs 1.52 lakh crore collected in October 2022. However, compared to the collections of Rs 1.32 lakh crore in November 2021, they were higher by 11 per cent, government data revealed on Thursday.

Despite the slide in GST collections in November, they have remained at more than Rs 1.40 lakh crore for nine months in a row now.

Economists though see this in line with their expectations, saying the rise in GST collections in October 2022 was mainly due to a boost from quarter-end payments.

"GST inflows in November 2022 recorded a healthy 11 per cent expansion over November 2021, and printed in line with our expectations.

The sequential dip in collections in November 2022 relative to October 2022 reflects the boost from quarter-end payments in the latter month, as the inflows in each month pertain to the activity in the previous month. Moreover, while festive spending is assessed to have been high in October, the generation of GST e-way bills had moderated sequentially given a higher number of holidays in that month," said Aditi Nayar, Chief Economist at ICRA.

"While the overall GST collections are lower than last month and the increase in the statewise collections for this month is also lower than last month, since GST collections from import of goods have shown a significant increase, it is expected that the Customs collections would also be higher with the continuing stability in GST collections since the beginning of this financial year.

The GST collection targets set for the year are likely to be exceeded. Businesses would expect that the continuing buoyancy in collections leads to GST rate rationalisation in the next financial year," said M.S. Mani, Partner, Deloitte India.

"India has been clocking a healthy Rs 1.5 lakh crore as monthly GST collections, though this month's collections have been slightly lower than what is now almost the norm. Healthy, regular and robust GST collections are a mirror to the economy's performance.

So far India's story seems protected from the global economic trends and shows that domestic demand continues on a positive trajectory," said Saloni Roy, Partner, Deloitte India.

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