NEW DELHI: GST collections rose 15.4% to Rs 2,11,205 crore in July, the second highest since the new structure was implemented last Sept, on the back of a 29% jump in integrated GST (IGST) on imports. This was also the highest pace of growth since rate rationalisation.The rise in IGST on imports in July (for transactions in the previous month) may be attributed to higher prices of crude and other commodities in the wake of the West Asia conflict.The impact of strong economic activity in June, when factory output grew at its fastest pace in nearly two years, was also visible on the tax numbers, seen as an advance indicator of economic activity. Some of the price hikes in FMCG and automobile sectors would have also buoyed collections. Central GST mop-up was pegged 12.3% higher at just under Rs 40,000 crore, while state GST grew 8.7% to nearly Rs 48,000 crore.“The high GST collections tie in very well with the 7.3% increase in industrial production during June. It reflects continued economic resilience despite the challenges in the external environment…The steady growth in GST collections each month indicates that overall domestic consumption is becoming largely insulated from seasonal variations and external headwinds,” said MS Mani, partner at Deloitte India.Some experts, however, are worried about the continued rise in imports. “…one cannot ignore the elevated levels of import GST collections, which remain a nagging concern. This points to a persistent gap in domestic manufacturing capability despite the range of successful PLI and Atmanirbhar Bharat interventions rolled out over the past few years.
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It is likely that the sustained push by policymakers towards localisation of around 100 products (being talked about) over a period of time will help bridge this gap,” said Saurabh Agarwal, partner at EY India, a consulting firm.Net of refunds, which were 13% higher at almost Rs 30,000 crore, collections went up 15.8% to Rs 1,81,237 crore.Haryana logged the highest growth of 28%, followed by Gujarat and Puducherry (26%), Karnataka and Goa (23%), and Maharashtra (20%). Chhattisgarh (23% fall), Jharkhand and Manipur (20% decline) were among the laggards.
