May GST Collection Data Strengthens belief in Economic Activity Growth, Macroeconomic Stability, say Experts

The rise in May GST revenue indicates growth in economic activity and further strengthens the belief in India’s macroeconomic stability.

The 12 per cent rise on an annual basis in Goods & Services Tax (GST) revenue for the month of May indicates growth in economic activity and further strengthens the belief in India’s macroeconomic stability. Experts opined that the growth also shows increased compliance by the Industry.

GST collection grew 12 per cent in the month of May 2023 to Rs 1.57 lakh crore. The finance ministry reported the data after announcing the highest ever GST collection of Rs 1.87 lakh crore in April 2023. GST revenue collected in the month of May, 2023 is Rs 1,57,090 crore of which CGST is Rs 28,411 crore, SGST is Rs 35,828 crore, IGST is Rs 81,363 crore (including Rs 41,772 crore collected on import of goods) and cess is Rs 11,489 crore (including Rs 1,057 crore collected on import of goods), said the Ministry of Finance in a statement. “GST collection figures for May 2023 further strengthen the belief in India’s macroeconomic stability and continued growth momentum as we see a 12 per cent YoY growth. While the figures are comparatively moderate as compared to collections of April 2023, however that’s primarily on account of last FY closure activities getting accumulated and accounted for in the collections of last month,” said Saurabh Agarwal, Tax Partner, EY.

GST revenue has come in at more than Rs 1.4 lakh crore for the 14th consecutive months and the gross revenue has crossed the Rs 1.5 lakh crore mark for the fifth time since the inception of GST in India. “Highest ever GST Collections in May 2023 signal growth in economic activity and increased compliance by the Industry. At the same time, this also indicates steady economic progress and stability in the Indian economy,” said Tanushree Roy, Director, Nangia Andersen India.

India had recorded the highest-ever GST collection in April indicating a favourable trend signaling growth in domestic demand and the subsequent growth in the Indian economy. Deepak Jasani, Head of Retail Research, HDFC securities, said that the April GST numbers were on expected lines due to March year end push in sales. He added, “The May GST collections are modestly higher than expectations. They are in line with the nominal GDP growth assumptions for FY24. Considering the vehicle sales numbers and PMI manufacturing number for May, this creates a feel good factor about the economy at this point.”

Experts also added that the trend will continue and double digit growth in GST collections can continue for the next few months. “The Year-on-Year numbers for both the April and May months are consistently showing a healthy growth of around 11.50 per cent. This depicts the strength of the Indian economy amidst global slowdown. Credit of the on-year rise also goes to the streamlining of tax compliances which is leveraged with technology, anti-evasion drives taken up by the GST department,” said Saket Patawari, Executive Director – Indirect Tax, Nexdigm.

During the month, revenue from import of goods was 12 per cent higher and the revenues from domestic transactions (including import of services) were 11 per cent higher than the revenues from these sources during the same month last year.