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Informist, Monday, Apr. 21, 2025

 

--Fin min officials: GST mop-up seen touching INR 2.30-2.40 tln in April

--Fin min officials: GST mop-up seen 10-14% higher on year in April

--Fin min officials: See FY26 avg monthly GST mop-up INR 2.01-2.03 tln

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – India's goods and services tax collection is likely to set a new record in April, with revenue seen in the range of INR 2.30 trillion to INR 2.40 trillion owing to upbeat economic activity, two senior finance ministry officials told Informist. "Collections in April may be 10-14% higher than the last year," one of the official said, basis provisional data available with the government.

 

In April 2024, the government had collected INR 2.10 trillion of GST, the highest so far. Data for April will be released on May 1. In March, the total GST collection was INR 1.96 trillion, up 9.9% on year.

 

Robust demand in the economy in March and April will likely lead to the "new milestone" figure of above INR 2.30 trillion, according to the second official. The number of e-way bills generated in March shows it reached a record high of 124.51 million, up 20.2% on year. "Part of this will reflect in the April GST data," the official said. An e-way bill is a GST document for transport of goods worth more than INR 50,000 within or outside a state. The number of e-way bills generated is taken as a lead indicator of economic activity and domestic trade. Generally, e-way bills generated in the latter half of the month reflect in GST collections in the next month.

 

Moreover, GST collections in April are usually the highest in each financial year owing to healthy year-end domestic transactions, the second official said.

 

The Budget for 2025-26 (Apr-Mar) has projected the Centre's share in GST collections will rise 11.3% this fiscal to INR 10.11 trillion. The total GST collection, excluding the cess, is roughly divided equally between the Centre and states. The Budget also assumed nominal GDP growth of 10.1% in the financial year, thereby implying a GST buoyancy of 1.1 in FY26. Tax buoyancy refers to the change in a country's tax revenue growth with respect to the change in its nominal GDP. A tax buoyancy rate of over one means growth in tax collections is faster than nominal GDP growth.

 

The officials said according to the government's estimate, GST collections are seen averaging INR 2.01 trillion to INR 2.03 trillion a month in FY26, as against the INR 1.84 trillion a month in FY25. "Above INR-2-trillion collection each month will likely be the new normal," the second official said. In the last few financial years, around 41% of total GST collections contributed to Central GST mop-up.

 

Assuming an average of INR 2.01 trillion to INR 2.03 trillion GST collection per month, and a 41% contribution of it to CGST, the government will be able to just about meet its target of INR 10.11 trillion in FY26. According to Budget estimates, 35.6% of Centre's revenues comes from GST, and it also covers 20% of the government's total expenses.  End

 

Edited by Ashish Shirke

 

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