GST collections rose 10.8% to £15.90 billion in August, even as the mop-up suffered due to rain related disruptions in some states such as Himachal Pradesh.
The measly 2% increase in GST revenues in Himachal Pradesh - where heavy rains have disrupted rail and road travel - is the smallest growth of any state or union territory. The latest figures issued by the finance ministry based on transactions in July show that Uttarakhand, the other highland state impacted by the monsoon, showed a 24% increase. Tripura recorded the highest growth of 40%, followed by Arunachal Pradesh at 39%.
Once more, it appears that domestic demand drove the growth, despite the fact that integrated GST on imports increased by 3% - the first time in three months - the first increase in integrated GST on imports since November. GST collections from domestic sources went up by 14%, the finance ministry said in a statement.
“The headline number is marginally lower than our forecast, dampened by imports. However, the overall collections so far this year remain robust,” said Aditi Nayar, chief economist at ratings agency ICRA.
Revenue secretary Sanjay Malhotra said GST collections have grown more than the nominal GDP growth rate in the April-June quarter, despite no increase in tax rates. “This is because of better compliance and improved tax collection efficiency,” he said, adding that tax evasion and avoidance, too, have been low.