Octoberfest: Exports Rise 42.3% & GST Mopup Up 24%

India’s merchandise exports increased for the eleventh consecutive month in October, growing 42.33% on year to $35.47 billion, led by engineering goods, petroleum products and gems and jewellery. Government data also showed a 62.48% rise in imports to $55.37 billion, leaving a trade deficit of $19.9 billion compared with $9.15 billion a year earlier. In September, the trade gap was $22.59 billion, a 14-year high.

“This (data) has not only added positive sentiment for exports but has also further enthused the exporters to perform with much more vigour and zeal, thereby achieving the $400 billion merchandise export target in the current fiscal,” Federation of Indian Export Organisations president A Sakthivel said.

Exports of engineering goods rose 50.7%, and those of gems and jewellery grew 44.2%.

On a month-on-month basis, October’s merchandise exports were almost 5% higher than $33.8 billion in the trailing month. Gold imports more than doubled to $5.1 billion last month.

“Non-oil, non-gold imports surged further to $35.8 billion in October, with a broad-based uptick across various commodity groups reflecting rising commodity prices, the expectation of healthy festive demand and a turnaround in domestic economic activity,” said Aditi Nayar, chief economist at ratings firm ICRA.

Economic recovery, increased compliance and an upward trend in returns filed leading to timely payment of taxes all aided GST collections last month. The government’s action against tax evaders to plug revenue leaks also helped. The October collection is 24% higher on-year and 36% more compared with two years earlier. This was the fourth straight month when the revenue crossed the ₹1 lakh-crore mark — it has crossed the mark in six of the first seven months this fiscal year.

“The department has worked hard on compliances too, which has also contributed to the rise. We have sent out a clear message that without complying, you will not be able to carry out business … Such persons will be out of the system,” revenue secretary Tarun Bajaj said.

Experts expect headline GST collections to remain healthy in a range of ₹1.25-1.35 lakh crore in November 2021. “Overall, we expect the CGST collections to exceed the GoI's FY2022 BE (budget estimate) of ₹5.3 lakh crore by up to ₹50,000 crore,” said Nayar of ICRA. The gross GST revenue collections in October 2021 were ₹1,30,127 crore. These comprised central GST of ₹23,861 crore, state GST of ₹30,421 crore, integrated GST of ₹67,361 crore (including ₹32,998 crore on import of goods) and cess of ₹8,484 crore (including ₹699 crore on import of goods). During the month, revenue from import of goods was 39% higher from a year earlier. From domestic transactions (including import of services), revenue was 19% higher.

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