GST collection shows growth for the first time since March
The Goods and Services Tax (GST) collection, a tax on consumption, has shown the first sign of recovery in business activities since the outbreak of Covid-19 pandemic and subsequent lockdown from March 25 with a 4% year-on-year growth at Rs 95,480 crore in the September, and a 10.4% jump over the preceding month, official data said.
Interestingly, GST collection for September this year in Maharashtra, a key industrial state remained almost stagnant over the corresponding period last year at Rs 13,546 crore, according to the data released by the Union finance ministry on Thursday. Karnataka saw a 5% contraction (Rs 6,050 crore) in the period.
Other major industrial states have shown positive revenue growth in September this year over the corresponding period last year. Tax collection from Haryana (Rs 4,712 crore) and Tamil Nadu (6,454 crore) jumped 15% while Gujarat saw a 6% growth at Rs 6,090 crore.
Experts say that the worst is over and collection is expected to increase in coming festival months depending on the unlockdown steps taken by various states. MS Mani, senior director at consultancy firm Deloitte India said, “A modest increase of 4% in the GST collections compared to the previous year indicates that the economic recovery process is underway, with some key large states also reporting increased collections.”
The GST collection grew for the first time after contractions for six months in a row. The indirect tax collection that saw a declining trend since March (8.4%) this year, plunged 72% in April at Rs 32,172 crore, the lowest ever since its launch on July 1, 2017. The 68-day hard lockdown since March 25 was also reflected in the May collection with 38% annual fall (Rs 62,151 crore). The fall in revenue, however, slowed to 9% in June (Rs 90,917 crore) mainly on receipts for the lockdown period. Subsequently, the annualised revenue collections fell 14.3% in July (Rs 87,422 crore) and 13% in August (Rs 86,449 crore).
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“The gross GST revenue collected in the month of September, 2020 is Rs 95,480 crore of which CGST [Central GST] is Rs 17,741 crore, SGST [State GST] is Rs 23,131 crore, IGST [integrated GST] is Rs 47,484 crore (including Rs 22,442 crore collected on import of goods) and Cess is Rs 7,124 crore (including Rs 788 crore collected on import of goods),” the finance ministry statement said.
The government has settled Rs 21,260 crore to CGST and Rs 16,997 crore to SGST from IGST as regular settlement, it said. “The total revenue earned by Central government and the state governments after regular settlement in the month of September, 2020 is Rs 39,001 crore for CGST and Rs 40,128 crore for the SGST,” it added.
“During the month, the revenues from import of goods were 102% and the revenues from domestic transaction (including import of services) were 105 % of the revenues from these sources during the same month last year,” it said.
Abhishek Jain, tax partner at consultancy firm EY India said, “With a significant part of the economy resuming operations and international trade as well resuming pace, the collections have shown decent growth. The increased revenues indicate reinstatement of normalcy in business operations and provides an in general optimistic outlook.”
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