In FY24, monthly GST collection to rise 7% on average
India’s monthly goods and services tax collection is expected to expand at more than 7% on average in the new fiscal year on robust economic growth and more people paying taxes for what they consume, a top official from the Finance Ministry said.
Revenue from the consumption tax is expected to clock in at over ₹1.80 lakh crore ($21.6 billion) on an average monthly basis from the fiscal year starting April, according to Sanjay Kumar Agarwal, chairman of the Central Board of Indirect Taxes and Customs.
The collection averaged ₹1.68 lakh crore a month in the last fiscal year and ₹1.51 lakh crore in 2022-23.
A barometer for economic activities, the GST tax collection should hit a record of more than ₹2 lakh crore this month alone, Agarwal said.
The revenue boost this year can help the government cut back its fiscal deficit while allowing for more spending to fuel growth in Asia’s third largest economy.
“India’s economy is growing robustly and is getting more formalized,” Agarwal told Bloomberg in an interview. “With more digital payments, increases in online sales and better compliance, we expect the tax collections to go up in a very healthy manner this year.”
One of the world’s fastestgrowing major economies, India is estimated to have expanded 8% or higher in the last fiscal year ended March 31. The South Asian nation is poised to grow over 7% in the current year.
Agarwal said the indirect tax department is looking to cut down the time taken for cargo clearance at seaports, potentially bringing down the logistics costs.
The customs department, which also comes under Agarwal, is working on this initiative as the government looks to boost the ease of doing business in India, which is courting investors and companies diversifying away from China.
“We want to reduce the average clearance time for imports to 48 hours from the current 80 hours in the next five years,” Agarwal said.