After a sluggish first half, the goods and services tax (GST) collection in Punjab surged in the third quarter of the financial year 2024-25 to attain the year-on-year growth target of 12% set in the state budget.
The 5.97% year-on-year growth in GST mop-up in the first six months of 2024-25 was the slowest in four years, but the collection of ₹6,518.57 crore during the October-December quarter on account of better consumption and increased compliance more than made up for the shortfall. This was 23.67% higher than the corresponding period of financial year 2023-24.
The total collection during the April-December period of 2024-25 stood at ₹17,318.21 crore, up 11.98% from ₹15,464.79 crore in the same months of the previous fiscal, according to data of key fiscal indicators. This is around 68% of the full-year GST revenue target of ₹25,750 crore set by the state government in the budget estimates presented in March 2024 for the current financial year.
A taxation department official stated that the year-on-year increase in GST collection in the April-December period matches the 11.95% year-on-year growth projected this year. “Anti-evasion activities, including increased supervision and data analysis, have been undertaken to plug loopholes and revenue leakage. In addition to better enforcement and increased compliance, growth in consumption during the festival season also contributed significantly in the past three months. We hope to sustain this momentum in the January-March quarter also,” said the official, who did not want to be named.
In the first half of financial year 2024-25, the growth in goods and services tax (GST) collection had slowed to a four-year low with a collection of ₹10,799.64 crore against ₹10,193.94 crore in the corresponding period of previous year.
The sluggish growth in the GST, the largest source of tax revenue in Punjab, had set alarm bells ringing for the government in the debt-laden state, which is grappling with a mounting debt burden. The goods and services tax makes up almost a third of the state’s tax revenues.
The tax revenues reported an increase of 14.87% year-on-year during the April-December period, going up to ₹55,550 crore from ₹48,360 crore. The tax revenue growth, which is only a tad lower than the projected increase of 15.14%, has come on the back of revenue of ₹4,172 crore from stamps and registration (up 33% year-on-year), ₹16,284 crore from state’s share of central taxes (up 21%) and ₹7,695 crore from excise duty (up 15%).
