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FALL IN GST COLLECTION AFTER 4 MONTHS
The government’s goods and services tax collections fell below the Rs 1-lakh-crore mark after four months.
GST collections for February, collected in March, was Rs 97,597 crore against Rs 105,366 crore in January, according to a statement by the Ministry of Finance. That’s a decline of 7.37 percent over January and 8.42 percent over the year-ago period.
This came even as India restricted input tax credit—what businesses get for paying taxes on inputs—to the extent of 10 percent of eligible credit if all invoices are uploaded by the taxpayers’ suppliers from January. The government is increasingly looking to check GST evasion as poor tax compliance adds to its revenue collection woes amid a broader slowdown in the economy.
Still, total gross GST collections for the financial year ended March 31 at Rs 12.22 lakh crore were higher than the revised target of Rs 11.26 lakh crore, according to BloombergQuint’s calculations. The finance ministry, in Union Budget 2020-21, had lowered the GST collection target from Rs 12.17 lakh crore. However, out of the government’s budgeted GST revenue of Rs 6.12 lakh crore, it has collected about Rs 5.46 lakh crore, according to official data. This includes CGST, Centre’s share of IGST and GST compensation cess.
The decline in GST collections is primarily due to the unexpected outbreak and impact of Covid-19 on business continuity and consumption amid an ongoing economic slowdown.Many assessees couldn’t file their GST returns and make payment due to Covid-19, and the due date has been extended till June, There will be further reduction in the next three months also due to lockdown, he said.
However, it’s encouraging that GST collections didn’t witness a significant dip this month, specifically with the numbers expected to reduce in coming months, including collections in April. “With most businesses being non-operational for a considerable period in March and the relaxation of delayed payments being allowed, collections in the coming quarter would see quite a fall.”
Break-Up Of GST Collections For February:
Central GST: Rs 19,183 crore
State GST: Rs 25,601 crore
Integrated GST: Rs 44,508 crore
Compensation Cess: Rs 8,306 crore
Integrated GST is settled between the states and the central government based on consumption in respective states. After the settlement, central GST and state GST stood at Rs 41,901 crore and Rs 43,516 crore, respectively. The central government has also apportioned unsettled balance Integrated GST of Rs 6,000 crore on ad-hoc basis in the ratio of 50:50 between centre and states/union territories.
The number of GST returns filed remains steady over the previous month. Total number of GSTR-3B returns filed for February by March 31 was 76.5 lakh compared with 83 lakh in January and December each.
Jammu and Kashmir and Mizoram witnessed the sharpest drops in their monthly GST revenues. State GST for J&K fell 29 percent year-on-year to Rs 276 crore, the statement said. Mizoram’s state GST fell 33 percent over the previous year to Rs 33 crore. High grossing states like Maharashtra and Tamil Nadu saw their SGST fall 4 percent and 11 year-on-year, respectively.
Source: Bloomberg Quint
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