- GST revenues have remained strong despite stricter audits
- The tax base is expected to widen in 2024
- The current weighted average tax rate under GST is lower than the revenue neutral rate of 15%
- The GST regime has benefited both the Centre and states in terms of revenue collections
- A review of GST slabs with simplification as a key objective is expected after the Lok Sabha elections
- The aim of the review should be to expand the tax base and improve tax credit flows
- Gross GST collections have grown by 12% year-on-year in the first eight months of the current fiscal year
- Central GST (CGST) collections have increased by 16.7% and State GST (SGST) collections have risen by 15.4%
- IGST collections, which include collections from import of goods, have grown by 8.6%
- Collections from cess, which compensate states for revenue loss, have increased by 12.9%
- The Centre extended the levy of compensation cess till March 2026 due to insufficient collections during the pandemic
- Even if the cess collections are removed, the growth rate in GST collections remains similar
- The slow growth in collections from import of goods is due to contraction in merchandise imports.
Source: a2ztaxcorp.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
