The goods and services tax (GST) collection in Punjab grew by a little over 8% year-on-year in September, showing a clear sign of economic recovery after months of subdued business activity due to the Covid-19 pandemic.
This is the first time that the monthly GST collection has shown an increase year-on-year in the first half of the financial year 2020-21 during which the coronavirus-induced lockdown had hit the businesses and the government revenues hard. The GST collection, including both state goods and services tax (SGST) and integrated goods and services tax (IGST), was Rs 1,055.23 crore in September 2020 as against Rs 974.96 crore in the corresponding month previous year, showing a growth of 8.23%, according to the data compiled by the taxation department. September’s mop-up is also 7% more than the previous month (August 2020).
Commissioner (taxation) Nilkanth S Avhad said the numbers signal economic recovery and an improvement in business sentiment. “However, there may be a minor component of tax payments for previous months in the last month’s collection as the Central government had given relaxation to small businesses with a turnover of less than Rs 5 crore in filing of return,” he added.
The relaxation ended of September 30. The value-added tax (VAT) and central sales tax (CST) collection – most of which comes from diesel and petrol, have reported 39% increase year-on-year. Against Rs 332 crore in September 2019, the collection was Rs 462.98 crore this time. The jump in VAT is mainly on account of the increased rates of petrol and diesel.
{{/usCountry}}The relaxation ended of September 30. The value-added tax (VAT) and central sales tax (CST) collection – most of which comes from diesel and petrol, have reported 39% increase year-on-year. Against Rs 332 crore in September 2019, the collection was Rs 462.98 crore this time. The jump in VAT is mainly on account of the increased rates of petrol and diesel.
{{/usCountry}}However, the overall GST mop-up during the first half of the financial year 2020-21 has been sluggish, dropping by 31% year-on-year. The state’s collection for the April-September period was Rs 4,685.72 crore as against Rs 6,790.34 crore during the corresponding months of the previous year.
The dip in revenue has been a dampener for the fund-starved government even though its monthly GST revenue is protected at Rs 2,403 in 2020-21. At the time of switching to GST, the Centre had guaranteed 14% year-on-year growth over the 2015-16-base and the state was to be compensated for any shortfall. Though there is a shortfall of Rs 8,312.77 crore in the GST revenue during the April-August period, the state has not received any compensation so far. The Centre, which, too, has seen a drop in its collections, offered two options – borrow the compensation amount arising out of GST implementation, or the entire shortfall – to the states with certain riders, but the Punjab government has turned down both.