GST collection fell 14% to Rs 87,422 crore in July: Govt
Experts said the GST collection, which is a weathervane of economic health, is increasingly improving and the trend is positive.
The Goods and Services Tax (GST) collection in the month of July fell 3.8% at Rs 87,422 crore compared to Rs 90,917 crore collected in the previous month, while the revenue mop up in July this year saw a 14.3% year-on-year decline due to the coronavirus pandemic that has had a devastating impact on the economy.
“The revenues for the last month [June 2020] were higher than the current month. However, it is important to note that during the previous month, a large number of taxpayers also paid taxes pertaining to February, March and April 2020 on account of the relief provided due to Covid-19,” a finance ministry statement said on Saturday. The taxpayers with turnover less than Rs 5 core still enjoy relaxation in filing of returns till September 2020, it added.
Experts said the GST collection, which is a weathervane of economic health, is increasingly improving and the trend is positive. Pratik Jain, partner and leader, indirect tax at consultancy firm PwC India said, “June and July data reveal that broadly the collections are stabilising between 85-90% of corresponding period last year. This is also corroborated with number of E-way bills being generated on a daily basis, which indicates that supply chain is getting back to normal.”
GST collection was badly hit in the current financial year due to the 68-day nationwide lockdown since March 25 to check the spread of Covid-19. The collection in April 2020 plunged 72% at Rs 32,172 crore compared to the same month last year. It fell 38% in May 2020 at Rs 62,151 crore due to over same month previous year. The year-on-year fall in June this year had come down to 9%.
The gross GST revenue collected in the month of July, 2020 is Rs 87,422 crore of which the central GST (CGST) is Rs 16,147crore, the state GST (SGST) is Rs 21,418 crore and integrated GST (IGST) is Rs 42,592 crore. The cess collection in the month is Rs 7,265 crore, the finance ministry statement said.
“The government has settled Rs 23,320 crore to CGST and Rs 18,838 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of July,2020 is Rs 39,467 crore for CGST and Rs 40,256 crore for the SGST,” it added.
Jain said, “This augurs well for the government and collections are likely to improve further as lockdown is eased progressively. Industry can perhaps hope for some more GST relief, particularly in form of liquidity support as they navigate through the slowdown.”
“While the overall GST collections for the month is heartening , the collections in many of the major states coming close to last year’s collections indicates that the recovery process has slowly started with the unlockdown process underway in these states,” MS Mani, partner at consultancy firm Deloitte India said.
“The progressive unlockdown steps taken by various states in June are reflected in the improvement in GST collections for July although the figures also include some transactions in respect of earlier months,” Mani added.
Rajat Bose, partner at law firm Shardul Amarchand Mangaldas and Co said, “While the collections in July are less than the collections in June, however, one must keep in mind that collections in June also included collections for the month of March, April and May. Hopefully, this trend should continue in the coming months, especially since festive season has started in the country.”