November GST Collection Moderates To Rs 1.7 Lakh Crore As Lower Tax Rates Reflect

India's gross goods and services tax (GST) collections came in at Rs 1.7 lakh crore in November, lower as compared to Rs 1.95 lakh crore in the preceding month, as the impact of rate rationalisation came fully into effect.

On a year-on-year basis, the collection has risen marginally by 0.7%, showed the official data released on Monday.

The Central GST collection in November stood at Rs 34,843 crore, up as compared to Rs 34,141 crore in the year-ago period. However, State GST dipped to Rs 42,522 crore from Rs 43,047 crore, and Integrated GST declined to Rs 46,934 crore from Rs 50,093 crore.

The net GST collections in November were up by a modest 1.3% to Rs 1.52 lakh crore. In the year-ago period, it stood at Rs 1.5 lakh crore.

This uptick was contributed by a decline in refunds availed by the taxpayers in November. The refunds issued during the month amounted to Rs 18,954 crore, down 4% as compared to the year-ago period.

Notably, India implemented the biggest GST reform in September, by slashing the tax slabs from four to two. The slabs of 12% and 28% were eliminated, and most taxable items were brought in the 5% and 18% slabs. An additional slab of 40% was created for select "sin" or luxury goods.

The GST 2.0 was rolled out on Sept. 22, ahead of the festive season. However, October tax collections were up 4.6% to Rs 1.95 lakh crore, owing to the higher consumption in the period around Diwali.

Also, the full effect of GST rationalisation across most sectors was felt in November, which could have contributed to the moderation in collections as compared to October, analysts say.

Cess collections in November dropped to Rs 4,006 crore, less than a third of Rs 12,950 crore in the same month last year. This decline is largely due to the elimination of compensation cess under GST 2.0.

"Previously, the compensation cess collection was also included in the GST collection data. However, present data has treated cess separately, and if the cess is also considered as a part of gross domestic GST collection, the numbers would show a further dip. This is because the cess collection has reduced by two-thirds, mainly due to only tobacco now being subject to the cess, and other items like aerated beverages and motor vehicles going outside its ambit," said Karthik Mani, Partner- Indirect tax at BDO India.