NEW DELHI: The impact of the pre-GST pause in sales of several products such as cars and white goods, and lower rates implemented from September 22, slowed the growth in gross GST revenues, but the increase remained close to the Rs 2 lakh crore level, data for October showed. Official figures released on Saturday show that GST collections in October for September transactions totaled Rs 1.96 lakh crore, up 4.6% from Rs 1.87 lakh crore in October last year.This was the slowest rate of increase this financial year. In August and September, GST collection rose 6.5% to Rs 1.86 lakh crore and 9.1% to Rs 1.89 lakh crore. Gross domestic income grew 2% to Rs 1.45 lakh crore, while tax on imports rose nearly 13% to Rs 50,884 crore in October. The data showed that GST refunds rose 39.6% year-on-year to Rs 26,934 crore in October.In September, the GST Council had unveiled reforms to the GST rate structure, leading to a sharp reduction in rates on a range of items, bringing relief to consumers, and the latest data showed that fears of a decline in collections have been negated.The interest rate cuts, which came into effect on September 22, have revived consumption demand, and experts say GST revenues for November are likely to see a sharp recovery.“Despite the massive rate cuts effective from September 22, a slight increase in domestic GST collection is very encouraging and shows that demand is steadily increasing,” said Pratik Jain, partner at consultancy Price Waterhouse & Co LLP.“The consistent increase in GST refunds (both domestic and exports) shows the tax authorities’ confidence that GST collections will continue to show a positive trend going forward. Next month’s data would capture the full impact of the GST cuts and would be eagerly awaited,” Jain added.Thanks to a boost provided by a reduction in GST on 375 items, consumers flocked to shops and car dealerships, resulting in the highest Navratri sales in more than a decade, government officials had earlier said, citing industry data.“GST collections, while in line with immediate expectations, reflect subdued momentum in September, mainly due to the interest rate rationalization effect in most of September and deferred consumer spending ahead of the upcoming festive season. This expected slowdown is likely to be offset by more robust data in the month ahead, driven by seasonal upside,” said Saurabh Agarwal, Tax Partner at EY India. “The impressive high percentage growth in collections from states and universities like Arunachal Pradesh, Nagaland, Lakshadweep and Ladakh is a tangible indicator of holistic economic development across India,” he said.
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