Rupees 4,349 crore was collected as Goods and Services Tax (GST) revenue in Delhi in August this year—21% higher than the collection this month last year—suggesting that business activity and consumption has remained strong in the Capital despite high inflation, Delhi government officials said on Tuesday.
However, experts say that real growth may actually be modest.
According to documents shared by the Delhi government, ₹4,327 crore was collected in July, ₹4,313 crore in June and ₹4,113 in May. Experts attribute the rise in GST collection to increasing consumer demand (especially in sectors that were affected by the pandemic), improved compliance systems, and increasing inflation across the board. These numbers include central as well as state GST.
To be sure, this comes at a time when the country registered a record GST collection of ₹1.43 lakh crore in August, suggesting that collections were robust across several states.
In August 2021, the total GST collection was ₹3,605 crore which increased to ₹4,349 crore in August 2022. The month before as well, the year-on-year growth was strong with ₹4,327 crore GST revenue being collected in July 2022 compared to ₹3,815 crore in 2021. The total collection in June 2022 was ₹4,313 crore compared to ₹2,656 in June 2021. In May 2022, the total GST collection from Delhi was ₹4,113 crore compared to ₹2,771 crore in May 2021.
A Delhi government official said the government is leveraging data analytics and is trying to widen the tax base by identifying cases of fraud and critically examining tax filing by organisations.
According to experts, it is difficult to interpret year-on-year growth in collection in terms of what they indicate about the underlying economic activity unless item-wise information is available, since GST rates change from one year to another.
Suyash Rai, a fellow at Carnegie India, said that in the last few quarters, the growth in GST collection has mostly tracked the growth in nominal private consumption. “If we assume that the association persists, then the GST collection indicates continued consumption growth. However, since inflation also accelerated in August, the deflator would be high, and the real growth may be modest,” he added.
Brijesh Goyal, chairman of the Chamber of Trade & Industry, said a host of steps by the Delhi government have helped boost consumer appetite in the city like free electricity and water due to which people are saving more money.