The two year comparison for GST Collections is right there. For the first time, virtually for every month, GST collections have exceeded previous years figures. From Rs 18.07 Lac Crores in 2022-23, it has touched Rs 20.18 Lac Crores in 2023-24, a yearly rise of nearly 11.6%. The growth rate in Real GDP during 2023-24 is estimated to be 8.2% as compared to 7.0 % in 2022-23. Nominal GDP or GDP at current prices is estimated to attain a level of Rs 295.36 Lac Crores in the year 2023-24 as against Rs 269.50 Lac Crores in 2022-23, showing a growth rate of 9.6%.
Now, the increase of 11.6 % in GST Collections as compared to 8.2% increase in GDP settles the debate about GDP estimation in India, doesn't it ? But what is the reason behind the phenomenal rise in GST is itself a fascinating question, because of several factors.
The growth in GST was primarily fueled by a significant 15.3 % surge in domestic transactions. This indicates a healthy uptick in consumer spending and business activity within India. It is noteworthy that the highest peak achieved is in April 2024 at Rs 2.10 Lac Crores, a whopping 12.2% rise from 2023 figures. So by all parameters, we are witnessing a higher year-on-year growth probably between 12-15% of 2023-24 in the current year. With a normal to above average monsoon in sight, a stable government in place and above all macro political factors hopefully at least remaining the same, the target is achievable. But somehow, this phenomenon of relentless rise in GST collections begs the question ; if it really represents the genuine surge of goods & services, how long will this continue and what is the potential for GST target in India over the next couple of years. Centre's GST Collection @ Rs 8.49 Lac Cr was 27.8% of Gross Tax Revenue (GTR) of Rs 30.54 Lacs Cr in 2022-23. This went up to Rs 9.57 Lac Cr in 2023-24 ( 28.4% of GTR Rs 33.60 Lac Cr) in 2023-24. In 2024-25, this is projected at Rs 10.67 Lac Cr ( 27.8% of GTR Rs 38.30 Lac Cr). ( Source :Receipts Budget 2024-25) In the best case scenario GST collections may well exceed 30% of GTR (even @ 11% increase, it will exceed last years GST to GTR percentage of 27.8%). The point to note that y-o-y GTR in 2023-24 itself increased by 12.5%. So, these are good tidings for the country & the new government being sworn in on Saturday, June 8th, 2024.
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