India’s economic landscape is in the midst of a remarkable transformation, as evidenced by the latest data released by the National Statistical Office (NSO) on May 31, 2024. The nation’s fiscal year 2024 growth rate stands at an impressive 8.2%, marking the ninth instance since 1961 where the GDP growth rate has surpassed the 8% threshold. This robust growth underscores the vigorous momentum within the economy, poised to accelerate further under a stable central government.
The quarterly growth rates for FY 2023-24, consistently stable at 8.2%, 8.1%, 8.6%, and 7.8%, highlight the resilience of domestic economic activities, buoyant investment, and consumption demand, alongside strong corporate performance. As the new fiscal year 2024-25 unfolds, expectations remain optimistic with a promising monsoon season and positive ratings from global agencies bolstering this outlook.
In contrast to the global scenario where only three of the major five economies—China (5.3%) and the UK (0.2%)—have shown significant growth, India remains the fastest-growing major economy. Projections from the OECD suggest a potential slowdown for the US and China in 2025, positioning India at the forefront of global economic expansion.
GST: The Backbone of India’s Economic Framework
As India approaches the seventh anniversary of the Goods and Services Tax (GST) regime, several critical developments warrant attention. Since its inception on July 1, 2017, the GST has undergone continuous evolution, facing demands for the establishment of Appellate Tribunals and the inclusion of petroleum products and natural gas under its purview. The current phase signifies a shift from procedural adjustments to adjudication and appeals, indicating a potential rise in litigation and disputes.
The Central Board of Indirect Taxes and Customs (CBIC) has issued an advisory on special procedures for manufacturers of tobacco and pan masala, and provided new guidelines for personal hearings in GST DRC-01. Additionally, the introduction of the new E-way Bill-2 portal by the National Informatics Centre (NIC) aims to enhance efficiency, operating alongside the main portal since June 1, 2024.
Fiscal Fortitude: May 2024 GST Revenue Insights
May 2024 witnessed gross GST revenues reaching Rs. 1.73 lakh crore, a 10% year-on-year increase. This surge is attributed to a significant rise in domestic transactions (up 15.3%) and a deceleration in imports (down 4.3%). Post-refunds, the net GST revenue for May 2024 stands at Rs. 1.44 lakh crore, reflecting a 6.9% growth compared to the same period last year.
Strategic Reassignments: Territorial Jurisdiction Adjustments
A notable amendment in the territorial jurisdiction of Central Tax Officers has been executed by the CBIC, effective from August 5, 2023. The revised jurisdiction covers districts in Rajasthan, including Alwar, Jaipur, Jodhpur, and Udaipur, as stipulated in the amended Notification No. 02/2017-CT dated June 19, 2017. This realignment aims to streamline tax administration and enhance operational efficiency.
Proactive Measures: CBIC Guidelines for Early Recovery
In a move to safeguard revenue, the CBIC has established guidelines for initiating recovery proceedings before the conventional three-month period post-demand order service. Under Section 79(1) of the CGST Act, 2017, recovery can commence before the three-month deadline if deemed necessary for revenue interests. This proactive measure requires proper justification and approval, emphasizing the balance between revenue protection and business facilitation.
Special Procedures for Tobacco and Pan Masala Manufacturers
With the issuance of Notification No. 04/2024-CT dated January 5, 2024, specific taxpayers dealing with tobacco and pan masala are required to follow a newly established special procedure. This includes the submission of detailed information via forms GST SRM-I and GST SRM-II, with the GSTN portal facilitating machine registration and data filing.
E-way Bill 2 Portal: Enhancing Logistics and Compliance
The launch of the E-way Bill 2 portal signifies a major step towards improving the efficiency of logistics and compliance in the GST regime. This portal, operational from June 1, 2024, allows taxpayers and logistic operators to generate and update E-way bills independently, ensuring high availability and seamless operations even during technical issues on the main portal.
Enhanced Compliance: Personal Hearing in GST DRC-01
In response to a directive from the Madras High Court, the GSTN has enabled an option for taxpayers to request a personal hearing in GST DRC-01 responses. This functionality, now active on the GST portal, allows taxpayers to choose between ‘Yes’ or ‘No’ for personal hearings, enhancing the procedural fairness and transparency of the adjudication process.
Sustained Growth: Breakdown of May 2024 GST Collections
The GST revenue collection for May 2024 stands at Rs. 1.73 lakh crore, with cumulative revenue for FY 2024-25 reaching Rs. 3.83 lakh crore, reflecting an 11.3% year-on-year growth. The breakdown of collections includes Rs. 32,409 crore for CGST, Rs. 40,265 crore for SGST, Rs. 87,781 crore for IGST (including Rs. 39,879 crore from imported goods), and Rs. 12,284 crore from Cess (including Rs. 1,076 crore from imported goods). Leading states in GST collection growth include Delhi, Punjab, Uttarakhand, and Haryana, while states like Himachal Pradesh, Mizoram, Assam, West Bengal, Madhya Pradesh, and Tamil Nadu lag behind.
India’s economic journey continues to be a testament to strategic governance and resilient growth, setting a benchmark for global economies to follow.
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