In a testament to the resilience and dynamism of the Indian economy, gross goods and services tax (GST) collection soared by 12.54 percent year-on-year to an impressive Rs 1.68 trillion in February. The buoyant economic activity was further underscored by robust sales figures in the automotive sector, with both car and two-wheeler segments witnessing a significant annual uptick.
Car sales in the wholesale market surged to 373,177 units last month, marking an impressive 11 percent year-on-year growth and setting a new milestone as the highest for the second month of any calendar year and the third highest ever. Concurrently, the manufacturing sector exhibited strong momentum, fueled by an expansion in new export orders and easing pricing pressures. The Purchasing Managers Index (PMI) climbed to a five-month high of 56.9, underscoring the sector’s resilience and vitality.
Despite witnessing record highs in January, unified payment interface (UPI) transactions experienced a marginal dip in both value and volume terms in February. However, the overall trend remains positive, with continued robust tax collection contributing to the overarching momentum of the Indian economy.
Net GST revenue surged by 13.6 percent year-on-year to Rs 1.51 trillion in February, reflecting sustained growth momentum and positive performance. The net GST revenue for the first 11 months of FY24 stood at Rs 16.36 trillion, representing a notable 13 percent year-on-year increase. Gross GST receipts moderated compared to January but remained robust, with monthly collection consistently surpassing the Rs 1.6 trillion mark during FY24.
Driving the gross GST growth were increased collections from domestic transactions, which surged by 13.9 percent, along with an 8.5 percent jump from the import of goods. Amit Maheshwari, tax partner at AKM Global, attributed the robust GST collection to various factors including economic growth, enhanced compliance measures, broadened tax base, and sectoral expansion.
Abhishek Jain, partner at KPMG, emphasized that healthy GST collections have complemented the country’s GDP growth, further bolstering economic optimism. However, certain states witnessed a decline in GST collection, underscoring the need for targeted measures to ensure inclusive economic growth across all regions.
Overall, the buoyant GST collection figures underscore the resilience and vitality of the Indian economy, further fueling optimism for sustained growth and economic recovery in the coming months.