• Notification Date: 04-01-2025
• Notification No: N/A

GST collections show steady growth despite sluggish urban demand

India's goods and services tax rose 7.3% in December to Rs 1,76,857 crore, mirroring that of the economy: slowing demand in key sectors yet showing signs of resilience. Domestic collections rose 8.4% to Rs 1,32,589 crore, while imports contributed a 3.9% increase. The government also focused on refunding, where the amount shot up 45% to Rs 22,490 crore, bolstering the overall collections that were up 6.7% on a net basis.

The overall slowdown was as expected post the holiday season and consumer spending over the last three months had softened," feels Saurabh Agarwal, Tax Partner, EY India. "In terms of states, it was lopsided." While Sikkim, Haryana, and Punjab reported quite robust growth, Arunachal Pradesh, Meghalaya, and Andhra Pradesh witnessed very sharp declines. There is mounting anxiety over the relatively feeble performance of large states, such as Uttar Pradesh, Bihar, West Bengal, Gujarat, and Madhya Pradesh, where the growth rate is under 5%. Ahead of the Union Budget, industry heads are urging the government to undertake proactive steps that include reducing income tax and giving incentives to generate demand. According to experts, GST Council may also consider rate rationalization as a panacea to reduce the slowdown in collections. According to Pratik Jain, Partner at PwC, this Budget may play a pivotal role in implementing step-by-step initiatives to revive consumption and economic activities in the country.

Despite the challenges posed by December GST figures, an optimistic view, however, should be maintained only if policymakers swiftly take strategic actions within the coming months.