Festive Boost: How GST Cuts Impacted India's October Revenue
October's GST collection saw a slow growth of 4.6% compared to last year, despite an increase in demand during the festive season. Rate cuts on 375 items contributed to lower growth, but an increase in refunds and imports signals potential improvements in coming months.
- Country:
- India
The festive season traditionally induces a shopping surge, but India's gross GST collection growth slowed to 4.6% in October, hitting Rs 1.96 lakh crore. This marks the slowest fiscal increase so far, largely due to recent tax rate cuts on 375 items, from essentials to electronics.
October's lagging revenue growth contrasts with previous months' higher rates but reflects the pent-up demand and consumer restraint ahead of the festive season. Notably, GST refunds soared nearly 40% year-on-year, indicating growing tax compliance and smooth credit flows.
Economists suggest the subdued numbers may rebound next month, supported by stronger industrial output and festive-driven demand. Industry leaders anticipate this fiscal strength to propel upcoming GST reforms, potentially streamlining processes and fostering a tech-enhanced tax ecosystem.
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