Goods and Services Tax: What the monthly GST data shows
With the government unlikely to release monthly collection figures on the goods and services tax (GST) henceforth, an important high-frequency indicator to gauge the economic momentum will be missed.
Along with other high-frequency indicators such as car sales, PMI, direct tax collections, factory output and railway freight, the monthly GST mop-up data helps to paint a picture of the health of the economy in the previous month.
Together, these data points are used by policymakers and analysts to assess if any further measures are required to sustain the economic momentum.
The monthly data on GST mop-up is released on the first day of every month and indicates demand conditions in the economy in the previous month. This is because GST is a consumption-based tax and captures sales of products.
Further, the data on the indirect tax also provides some pointers to the health of the finances of the Centre and the states as it is an important source of revenue for both. It also gives an indication of the level of monthly imports as integrated GST is levied on imports.
