Preliminary figures released by the finance ministry indicate a 9.3% increase in Goods and Services Tax (GST) collections, reaching £17.21 billion in January.
These collections, reflecting transactions from December, mark the second-highest since the introduction of GST in July 2017 and the third instance of surpassing the £17 billion threshold. The ministry anticipates even higher figures as complete data is yet to be compiled, with collections recorded until evening contributing to the overall tally.
GST collections have remained robust, and there are expectations of an upward revision in the revised estimates for the current financial year, to be presented by Finance Minister Nirmala Sitharaman.
“The GST collections are in line with the other macroeconomic parameters, which indicate a significant uplift in economic activities, with even the IMF upgrading the growth forecast to 6.7% for FY 2023-24. The same collection trajectory in the next two months will ensure that the tax collection targets for the year are comfortably surpassed,” said MS Mani, partner at Deloitte.
A part of the jump in collections in January may be on account of completion of audits and investigations related to earlier years, said analysts.
“This consistent upward trend, evident in surpassing key milestones, reflects the effectiveness of improved tax administration and heightened taxpayer compliance. Overall, these positive indicators pave the way for continued economic expansion,” said Saurabh Agarwal, tax partner at consulting firm EY.