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GST Collections in November Surge to ₹1.82 Trillion

Why in the news?

November 2024 GST collections rose 8.5% YoY to ₹1.82 trillion, reflecting festive-driven demand. However, collections were slightly below October’s ₹1.87 trillion, highlighting uneven regional performance and potential economic recovery concerns for upcoming months.

About the GST Collections in November 2024:

• GST collections for November 2024 reached ₹1.82 trillion, an 5% year-on-year growth, according to official data.
• The collections reflect transactions from October, boosted by festive demand, providing a much-needed boost to consumption and industry.
• Sequentially, collections were lower than October’s ₹1.87 trillion but still indicate economic momentum.
• April 2024 remains the month with the highest-ever GST collections at ₹2.1 trillion.

Key Drivers and Observations

• Growth was driven by high-frequency indicators like the Purchasing Managers’ Index (PMI) and increased e-way bill generation.
• Domestic GST revenue grew by over 10% in FY25, aligning with GDP data indicating stronger domestic consumption.
• Import GST revenue grew by 6%, reflecting slower non-petroleum import growth.
• Authorities issued tax refunds of ₹19,259 crore in November, a decline of 9% year-on-year.
• After refunds, the Centre collected ₹1.34 trillion, and states received ₹43,047 crore.

Regional Trends and Concerns:

• States like J&K (25%), Sikkim (52%), and Mizoram (16%) recorded significant GST growth, signaling robust economic activity.
• In contrast, states with strong manufacturing bases, including Rajasthan (-1%), Andhra Pradesh (-10%), and Chhattisgarh (-1%), saw declines.
• Single-digit growth in Haryana (2%), Punjab (3%), and Tamil Nadu (8%) raises concerns about uneven regional performance.

Experts caution against interpreting festive-driven tax growth as sustained economic recovery, anticipating potential slowdowns in upcoming months.

Sources Referred:

PIB, The Hindu, Indian Express, Hindustan Times