treeviewThe Delhi government saw an increase in GST revenue in the first quarter of FY23. The state’s GST income rose to Rs 4,349 crore in August, up 21% year on year, indicating development in commerce and business in the city as well as consumer demand despite inflation. In the same month previous year, the GST revenue was Rs 3,605 crore. Despite rising inflation, the growth shows that corporate activity and spending in the National Capital remained solid. For the past few months, Delhi’s GST collection has been steadily increasing. The collection was Rs 4,113 crore in May 2022, then it increased to Rs 4,313 crore in June and Rs 4,327 crore in July.
This comes at a time when the country recorded a record GST collection of Rs 1.43 lakh crore in August, indicating that collections were solid across multiple states. According to the Finance Ministry, GST income has increased by 33% until August 2022, indicating a very strong buoyancy. According to the FinMin statement, the increase in GST revenues for six consecutive months is a clear result of several actions implemented by the GST council in the past to guarantee improved compliance. “Better reporting, along with economic recovery, has had a constant beneficial impact on GST collections,” it stated.
August is the sixth month in a row that GST collection has been higher across the country, showing a rise in consumption. According to experts, the high GST collections for six months in a row are important evidence that there has been very little impact of inflation on the Indian economy. With GST collection increasing incrementally, the Delhi government is optimistic about fulfilling its income projections in 2022-23, after the epidemic harmed revenues for the previous two years. It should be noted that the covid-induced lockdown harmed Delhi’s economy in 2020-21, and the government’s tax receipts fell by 19.53% compared to 2019-20.
Punjab reported a 23% increase in goods and services tax collection in the first five months of the current fiscal year earlier this month. In August, Punjab’s GST income increased by 17%, keeping it ahead of bigger states such as Uttar Pradesh, Madhya Pradesh, Gujarat, and Rajasthan. State finance minister Harpal Singh Cheema stated that the Bhagwant Singh Mann government’s actions had been efficient in plugging leakages. He stated that the rise in income was evident in the results.
Despite the large GST collection, states’ income growth would slow to 7-9%, according to Crisil research released this month. According to the rating agency’s analysis, sales growth accelerated to 25% in FY22 due to a lower base in the pandemic-affected FY21. In FY23, good tax buoyancy would underpin revenue growth, with Goods and Services Tax (GST) collections and devolutions from the federal government, which together account for up to 45% of state income, likely to exhibit solid double-digit growth, it added.