Karnataka tops GST charts with 10% growth during Dasara festival; collection hits Rs 14,395 crore in September

BENGALURU: Karnataka has topped the economically progressive states in GST collection during Dasara festival as it recorded 10% growth in tax revenue in Sept. This shows the enthusiasm among consumers making festival purchases after GST rate rationalisation that saw drastic fall in prices.According to a statement released on Saturday about the GST collection for Oct, which reflects the transactions that took place in Sept, the state collected Rs 14,395 crore; nearly Rs 13,080 crore was collected during the same period last year. While this is the gross collection including the components of central GST, tax on inter-state transaction, Integrated GST and cess, the state exchequer will get a net of Rs 7,065 crore after the deduction of these components.

Karnataka's performance is the best among the states considered Top-5 in GST collection. Bullish trend may continue

While Maharashtra recorded only 3% with Rs 32,025 crore, Gujarat recorded 6% with Rs 12,113 crore collection and Tamil Nadu recorded 4% with Rs 1,588 crore collection. In Uttar Pradesh, the tax collection was Rs 9,806 crore with 2% year-on-year growth.Only Telangana equalled Karnataka's growth rate with a collection of Rs 5,726 crore, but its base is lower at Rs 5,211 crore and it is not considered among the Top-5 states.

The state's performance is strikingly good as it even beats the national average of 2% growth, although the country collected a record Rs 1.96 lakh crore."There are multiple reasons for this growth in Karnataka. Mainly, it is the pent-up demand ahead of the festive season as the Centre had indicated the rate rationalisation more than a month ago before its implementation. Also, tax compliance was good that reflected in a 10% increase in tax returns filed compared to the monthly normal of about 7 lakh returns and the department's hard work to ensure effective enforcement played its role," said commercial taxes commissioner Vipul Bansal.The bullish trend is expected to continue in the next month's statement as it covers the transactions of October when Deepavali festival was celebrated and sales across the sector, especially in automobile, garments and electronic goods are seen to have recorded around 40% growth. "The price reduction definitely provided the booster dose during Dasara and Deepavali festivals. As we are still collating the data, the consumption across the sectors is observed to have increased by 35%-40%," said Kumar Rajagopalan, CEO of Retailers Association of India.

However, the Congress-ruled Karnataka government's concerns over the possibility of revenue short fall continue. The commercial taxes department officials expect the spur witnessed in the festival consumption will taper to normal from early November and insist that the shortfall is imminent."The GST rationalisation resulted in reduction of prices by 40% of the commodities that were moved from 28% to 18% and 60% of the commodities that moved from 12% to 5%. It takes 40% growth in consumption in normal months to ensure revenue neutrality, which looks impractical," said Bansal.