India's GST collection drops 14% due to Covid effects
July, however, a recovery from April and May when lockdowns, disruptions in economic activities dragged collections to all-time lows
The Covid-induced shrinking of economic activity for the past few months continued to have its impact on the Indian government's tax collections, with revenue under the Goods and Services Tax (GST) falling far below the psychological level of Rs1 trillion to Rs874.22 billion in July.
The July collections, which is 84 per cent of last year's numbers, is however a recovery from April and May when Covid-19-induced lockdowns and severe disruptions in economic activities resulting in GST collections nosediving to all-time lows.
GST collections for April was Rs322.94 billion, which was a mere 28 per cent of the revenue collected during the same month last year. In May it was at Rs620.09 billion, 62 per cent of the revenue collected during the same month last year.
Only in June that GST collections recovered to touch Rs909.17 billion.
"The revenues for the last month [June] 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. It may also be noted that the taxpayers with turnover less than Rs50 million continue to enjoy relaxation in filing of returns until September 2020," the finance ministry said in a statement.
Out of the total GST collection of Rs874.22 billion for July, CGST was at Rs161.47 billion and SGST was at Rs214.18 billion the official statement said.
IGST collections stood at Rs425.92 billion, including Rs203.24 billion collected on import of goods), and Cess collected was Rs72.65 billion, including Rs8.07 billion collected on the import of goods.
The government has settled Rs233.20 billion to CGST and Rs188.38 billion to SGST from IGST as regular settlement.
The total revenue earned by the central and state governments after regular settlement in July was Rs394.67 billion for CGST and Rs402.56 billion for SGST.
During July, the revenues from the import of goods were 84 per cent and the revenues from domestic transaction (including import of services) were 96 per cent of the revenues from these sources during the same month last year.
The revenues during the financial year has been impacted by Covid-19, firstly due to the economic impact of the pandemic and secondly due to the relaxations given by the government in filing of returns and payment of taxes due to the pandemic. However, figures of past four months show recovery in GST revenues.
Among the states, July collections have declined most in Uttarakhand, Delhi, Haryana, Jharkhand, Tamil Nadu, Maharashtra, Jammu and Kashmir and West Bengal. Only the states of Rajasthan, Nagaland, Madhya Pradesh and Andhra Pradesh have shown growth of GST revenue or have maintained same levels as last year in July.
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