Goods and Services (GST) tax receipts in India in July increased by about 11% to £16.51 billion, primarily due to domestic demand as imports struggled. The amount collected in July for transactions in June was above £16 billion for the fifth time, making it the third largest monthly mop-up after April 2018 (£18.70 billion) and April 2022 (£16.75 billion).
Domestic transactions saw robust growth with Central GST rising 15.6% in July to £2.97 billion and state GST increasing 147% to £3.76 billion. Integrated GST, which is levied on inter-state sales and imports, grew at around 8%, pulled down by a 0.4% decline in the levy on shipments coming from abroad. Similarly, the cess on imported and luxury goods fell 15.6% to £84 million, the lowest since February.
“There is a clear divergence between revenues on account of domestic transactions (including imports of services) and that on account of imported goods, with the latter averaging at just 0.8% year-on-year during April-July 2023, reflecting the compression in merchandise imports. This divergence is set to continue owing to the expectation of a contraction in merchandise imports in 2023-24,” said Aditi Nayar, chief economist at ratings agency ICRA.