The GST Council is likely to discuss rate rationalisation–hiking GST rates for some items while cutting pruning them for others–of about 150 items in its upcoming meeting.
The gross Goods and Services Tax (GST) collections in December came in at Rs 1.77 lakh crore, up 7.3% on year, data released by the finance ministry on Wednesday showed.
With this, the monthly gross GST mop-up has now stayed above the Rs 1.7-lakh-crore mark for ten consecutive months.
However, the pace of year-on-year growth slowed to a three-month low in December. In the April-December period, gross GST collections stood at Rs 16.33 lakh crore, up 9.1% on year, which is lower than the 11% growth anticipated earlier by the finance ministry officials.
As GST collections reflect the state of demand in the economy, a lower-than-expected growth in the mop-up may prompt the government to look at measures to boost consumption in the Budget for 2025-26, say experts. According to Pratik Jain, partner, PwC India, one of the ways to boost consumption is to rationalise the GST rates, which the GST council is currently working on.
In the April-December period, GST collections from domestic sources stood at Rs 12.37 lakh crore, up 10.1% year-on-year; imports contributed Rs 3.96 lakh crore, up 6% on year. December recorded an 8.4% growth in collections from domestic sources, but merely 3.9% from imports.
Meanwhile, refunds in December rose 45.3% on year to Rs 22,490 crore. As a result, net collections came in at Rs 1.54 lakh crore, up 3.3% on year. For April-December, the net GST collections stood at Rs 14.49 lakh crore, up 8.6% on year, and refunds at Rs 1.89 lakh crore, up 13.5% on year.
Saurabh Agarwal, tax partner, EY India said: “The government is providing more GST refunds for exports, signifying an increase in the volume of goods and services we are selling to other countries. This suggests that India is reducing its reliance on products manufactured abroad.”
MS Mani, partner, Deloitte India said the significant increase in both domestic and export refunds indicates that the “overall refund framework is now stable and its implementation on a sound footing”.
The GST Council is likely to discuss rate rationalisation–hiking GST rates for some items while cutting pruning them for others–of about 150 items in its upcoming meeting. According to sources, a Groups of Ministers’ (GoM) report has recommended hiking GST rates on a slew of items, such as garments, watches, shoes, etc. and suggested a special rate of 35% for aerated drinks and tobacco products. This is expected to fetch both the Centre and states an additional revenue of about Rs 22,000 crore per annum.
Source: www.financialexpress.com
