GST completes 6 years: Collection crosses Rs 1.6 lakh crore in June 2023

The Goods and Services Tax (GST) in India has completed six years since its inception on June 30, 2023. India’s indirect tax system has witnessed significant transformations since the introduction of the Goods and Services Tax six years ago. By consolidating various taxes like excise duty, service tax, and state-specific VAT, the GST has established a uniform tax framework throughout the nation. 

With the implementation of the GST, India’s largest indirect tax reform, the consistent monthly revenue of Rs 1.5 lakh crore has become the new standard. Meanwhile, tax officials are currently directing their attention toward combatting fraudulent individuals who are employing various tactics to manipulate the system, resulting in financial losses for the government. 

The GST framework encompasses four different tax rates that are applicable to a wide range of items. Essential items and goods of importance are either exempt from tax or subjected to a low rate of 5%, while luxury and demerit goods attract the highest rate of 28%. Additionally, there are two intermediate tax slabs of 12% and 18%. 

Furthermore, specific categories such as gold, jewellery, and precious stones are subject to a special rate of 3%, while cut and polished diamonds have a rate of 1.5%. Lastly, a cess is imposed on luxury, sin, and demerit goods falling under the highest tax slab of 28%. 

Before the introduction of GST, the combined effect of VAT, excise, CST, and their cascading impact resulted in an average tax liability of 31% for consumers.  

The initial year of GST in 2017-18 witnessed an average monthly collection of around Rs 82,000 crore, the average collection has surpassed Rs 1.50 lakh crore, registering a compounded annual growth rate of almost 13%. In April 2023, the revenue reached a record-breaking high of Rs 1.87 lakh crore while in May it stood at Rs 1.57 lakh crore. 

In June 2023, the monthly collection of GST exceeded Rs 1.6 lakh crore, indicating a year-on-year growth of 12%. Since the implementation of the GST regime, the revenue from GST has now exceeded Rs 1.5 lakh crore for the seventh time. The average monthly gross GST collection for the first quarter of three years has been consistently increasing. 

Finance Minister Nirmala Sitharaman, while speaking at an event on the completion of 6 years of GST in New Delhi on Saturday highlighted that tax growth for states stood at 8.3% prior to the implementation of GST. However, after the introduction of GST, tax revenues have witnessed an increase of 12.3%. 

The Finance Minister also emphasised that states have not experienced any loss under the GST regime. On the contrary, GST has brought about increased tax buoyancy for states, with a tax buoyancy rate of 1.15 even in the absence of GST compensation. 

Throughout the past six years, the government has implemented various measures aimed at improving the efficiency of interstate trade, such as the introduction of e-way bills. As a result, the movement of goods across state borders has become faster and more streamlined.