GST mop-up in May rises 12% y-o-y on robust demand

Goods and services tax (GST) collection in May rose 12 per cent over the same month last year to Rs 1.57 trillion, indicating that the economy is holding firm despite external headwinds. Experts anticipate GST would expand 10-11 per cent in this fiscal year, in step with the government’s growth estimate of 6.5 per cent.

With this, gross GST has crossed Rs 1.5 trillion for the fifth time since the inception of the indirect tax regime, making it a new base for this fiscal year. Monthly GST reported more than Rs 1.4 trillion for 14 months in a row.

“GST revenues in May have modestly exceeded our expectations. Over the next few months, we expect GST to print at Rs 1.55-1.65 trillion and record an expansion of 10-11 per cent in YoY terms, broadly in line with the nominal GDP growth expected in FY24,” said Aditi Nayar, chief economist, ICRA.