Punjab’s GST collection improves, registers 69% jump over May
The state government has reported the collection of Rs 869.66 crore in June as against Rs 515 crore in MayUpdated: Jul 03, 2020 22:59 IST
In what signals a pick-up in economic activity after two months of national lockdown, the Goods and Services Tax (GST) collection in Punjab posted an increase of 69% in June 2020 over the previous month.
The state government has reported the collection of Rs 869.66 crore in June as against Rs 515 crore in May. The June figure is 8.36% lower than the GST revenue in the same month of 2019 when the state’s collection, including both state goods and services tax (SGST) and integrated goods and services tax (IGST), stood at Rs 949 crore, according to the data available with the taxation department.
This gap was a lot wider in May when the GST collection was 48.4% short of last year’s Rs 998 crore. In April, the state’s goods and services tax had dived by 85.63%, going to Rs 156 crore from Rs 1,086 crore in the corresponding month last year.
The upswing in collections came as the state government started partially easing the coronavirus-induced lockdown in phases in May to open the markets and industry. The tax collection numbers are being widely seen as the first sign of a revival of economic activity even though the business sentiment in several sectors, including hospitality, travel, and tourism continues to be abysmal.
An indirect tax expert, however, said that any conclusion on the extent of economic recovery based on the goods and services tax collections of the past three months would be a hasty one as more data needs to be analysed. He said the collection figure of a month does not reflect the revenue of that month alone as the central government had extended the deadline for filing returns with interest given the Covid-19 situation.
“A detailed analysis of collections for February to June after all the returns are filed can give a more accurate picture. However, the sense of despondency that had set in at one stage is not there now. There is cautious optimism for the future,” he added.
Amid the present crisis, the improved collections will be a financial relief for the cash-strapped state government that has had to rely heavily on market borrowings to meet its spending needs, particularly fixed liabilities such as salaries, pensions, and debt servicing.
In the first three months the current financial year, about Rs 4,200 crore, including Rs 1,600 crore in June were raised from the market through the auction of government securities. The release of GST compensation of Rs 2,866 crore for the months of December 2019 and January and February 2020 in the first week of June also helped.
The Punjab government had imposed curfew – one of the first states to take the drastic action – on March 23 to check the spread of Covid-19. The state’s announcement was followed by a 21-day national lockdown the day, paralysing most of the economic activities.