GST receipts decline to three-month low but hold on to Rs 1.65 trn in Dec

Goods and services tax (GST) collection in December declined to a three-month low due to economic activities winding down after Diwali but remained elevated at Rs 1.65 trillion. The growth rate year-on-year fell to a three-month low of 10.3 per cent over Rs 1.49 trillion in December 2022-23. GST collection in a particular month is on account of production, sales, and purchases in the previous month.Thus, collection in December pertained to transactions in November, which was marked by holidays after Diwali, slowing receipts. The same trend was visible in other data points such as the core sector, which witnessed a six-month low growth rate of 7.8 per cent in November. GST collection has been Rs 1.65 trillion and above for six months of the nine this financial year. It did not fall below Rs 1.57 trillion in any month.Average monthly gross GST collection -- Rs 1.66 trillion in the first nine months -- represents a 12 per cent rise over the Rs 1.49 trillion recorded in the corresponding period of FY23. “While GST collection is slightly lower than what was seen last month, the consistent mark above Rs 1.6 trillion provides large fiscal confidence,” said Abhishek Jain, partner and national head (indirect tax), KPMG. Central GST (CGST) after the integrated GST settlement stood at Rs 70,501 crore in December, the third highest in the nine months, after April and October. With this, CGST yielded Rs 6.26 trillion during April-December -- 77 per cent of the Rs 8.12 trillion estimated in the Budget Estimates (BE) for 2023-24.

With three more months remaining this financial year, CGST collection is likely to exceed the Budget Estimate. After 42 per cent devolution to the states, CGST receipts, together with robust direct tax collection, would provide enough tax revenues to the government to bring its fiscal deficit to the budgeted 5.9 per cent of gross domestic product. This is likely to happen despite dwindling disinvestment receipts and expected higher revenue expenditure due to various subsidies. The earlier data showed direct tax collection after refunds grew 20.66 per cent to Rs 13.7 trillion till December 17 this financial year, accounting for a bit over three-fourths of the BE at Rs 18.23 trillion for 2023-24. In December, revenues from domestic transactions (including imports of services) were 13 per cent higher than those from these sources during the same month last year. This means GST on import of goods (integrated GST and cess) slowed collection. GST on import of goods rose just 3.65 per cent at Rs 42,613 crore in December year-on-year. Barring Sikkim and Meghalaya, every state saw growth in GST collection in December. Meghalaya saw flat GST receipts at Rs 171 crore. States and Union Territories such as Ladakh, Arunachal Pradesh, Andaman and Nicobar, and Lakshadweep saw growth in the range 35-310 per cent. Saurabh Agarwal, tax partner at EY, attributed this to increased economic activities in these areas. However, Rajasthan and Chhattisgarh each recorded a mere 1 per cent growth rate in December, while Jharkhand saw a 4 per cent rise. “While major states have continued their growth, deeper analysis is required for its lack in Rajasthan, Chhattisgarh, and Jharkhand,” said M S Mani, partner, Deloitte India.

- Business Standard 2th January, 2024

Household debt up, but India still lags emerging-market economies: RBI

Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...

External spillovers likely to hit India's financial system: RBI report

While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...

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