It Pays to Be Truthful. The Govt Must Release the June GST Data Immediately

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The nationwide Goods and Services Tax (GST), managed through a 100 percent data-driven digital and real-time tax network (GSTN), was launched on 1 July 2017. In line with yearly practice, monthly receipts and allocation data for June were due for release by the Government of India on 1 July 2024, the seventh anniversary of the GST system.

For reasons that remain a mystery, the government decided to celebrate the GST anniversary by stopping the release of monthly GST data on 1 July. The entire business world and media were astounded into silence. The irony of this matter was not lost on anyone.

Why did the Modi government take this step? How poor were the GST revenue receipts? Can the government hide this data for long?

Strange Decision, Stranger Communication

The monthly GST data release provides details of the central government’s receipts through Central GST (CGST), states’ receipts through State GST (SGST), inter-state GST (IGST) including IGST on imports, GST Compensation Cess in its gross and net refunds, and also the distribution of IGST amongst states. The information provides vital clues about the real functioning of the economy.

The Press Information Bureau (PIB) has released GST data every month until 1 June 2024, without fail, for the last seven years. Strangely, there was no PIB release on 1 July 2024. Instead, some journalists were called by the officials of the Revenue Department in the Ministry of Finance. Without an official note or press release, they were informed that the GST collections for June 2024 were Rs 1.74 lakh crore.

A few media channels reported later that they were also told that the GST collections were so "robust over the past year" that it was "breeding discontent" among the public as they were feeling that the government was "collecting too much of tax." This is a lame excuse and a hogwash, in fact.

GST collections of Rs 1.74 lakh crore for June 2024 meant that GST growth, on a year-on-year basis, was only 7.74 percent over June 2023 collections of Rs 1.61 lakh crore. This was the lowest growth of GST collections since June 2022.

Media channels later reported that they were told that the GST collections were so “robust over the past year” that it was “breeding discontent” among the public as “the government was collecting too much tax.” This statement is a falsity and a lame attempt at an excuse. It is complete hogwash. The public wonders why data is being withheld while the government communicates so strangely.

GST Collections are Falling

I wrote an opinion piece—GST | Is it booming? Has growth flattened? Will it decline further?—on 7 May 2024 pointing out the GST’s low growth and IGST’s sharply declining growth of IGST in 2023-24. It declined further in April 2024. I argued that this fact should be sounding alarm bells. Curiously, there were data discrepancies in the March and April 2024 releases. I pleaded for more accurate data.

Ironically, without sensing any disquiet amongst the people, on 1 May 2024, the government celebrated the “highest ever GST at Rs 2.10 lakh crore.” There was worry about whether this information was accurate, and what caused a sudden change in the trend.

In April 2024, GST receipts of Rs 2.10 lakh crore recorded year-on-year growth of 12.42 percent. However, for the fiscal year 2023-24, GST growth dropped to 11.75 percent, down from 30.48 percent in 2021-22 and 21.76 percent in 2022-23. The declining trend has intensified over the last two months.

In May 2024, GST collections were reported at Rs 1.73 lakh crore, which meant that the year-on-year GST growth—9.96 percent—fell below 10 percent for the first time since June 2022.

After the new government took over on 9 June, headed by the same prime minister and same finance minister, June’s lowly GST growth of 7.74 percent must have been too bitter a pill to swallow.

That discomfort could explain the unfortunate decision to withhold GST numbers in July 2024.

No Point in Hiding the Bad News

The Modi government has different standards for sharing good and bad news.

When data reveals that the economy or a certain segment is doing well, the government is the first to claim credit even when the outcome is not necessarily due to their policy and programmes.

When India received high foreign direct investment (FDI) flows in 2020-21 and 2021-22, the government lauded itself for successfully attracting FDIs. When FDI flows declined over the last two years, especially in 2023-24, they ignored the issue completely.

Similarly, when many start-ups turned unicorns and received billions of dollars in funding, India’s start-up story was splashed all over the media as the government’s crowning achievement. When the funding winter set in, the government stopped talking about start-ups and unicorns except repeating the cliché that India is the third largest start-up eco-system.

Growing merchandise exports were touted as India’s shining performance in 2021-22 and 2022-23. When exports dipped in 2023-24, the narrative shifted to services exports.

In the realm of finance, personal income taxes have been doing very well for the last three years. While corporate taxes have shown signs of flagging, total direct taxes continue to do very well. The government and the officials of the Revenue Department have no qualms about claiming credit every week for direct tax performance. The same officials, however, have stopped the GST release when the going became tougher.

No government data remains hidden forever. Moreover, attempts to conceal it generate more curiosity in the public. It doesn't make sense to boast about successes while keeping quiet about failures and shortcomings.

Be Truthful; Release the Data

There is no reason whatsoever to stop releasing GST data. If someone in the government believes the dip in GST revenues is temporary and expects to resume releasing GST data once favourable results come in, they might find that this isn't the case this year.

Moreover, such actions raise unnecessary questions about the government’s motives, placing its credibility on the line.

The data, however good or bad, should be transparently disclosed and studied. If it shows something is doing well, the same policies should be strengthened and continued. If it is throwing up warning signals, it is advisable to do a course correction.

It pays to be truthful. Release the GST data immediately.

(The author is former Economic Affairs Secretary and former Finance Secretary of India. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)