Goods and services tax collection slips below Rs 1 lakh crore in June
Goods and services tax (GST) collection slipped below Rs 1 lakh crore in June for the first time since September 2020, a sign the second wave of the coronavirus has severely hurt the economy.
The collections at Rs 92,849 crore are the lowest in 10 months since August when it was Rs 86,449 crore, official numbers released Tuesday showed.
The collections in June 2021 are primarily for supplies made in May — a month when most states were under different levels of lockdown, reducing business activity, the finance ministry said.
The gross GST revenue collected in June is Rs 92,849 crore, of which central GST is Rs 16,424 crore, state GST is Rs 20,397 crore, integrated GST is Rs 49,079 crore, including Rs 25,762 crore collected on import of goods, and cess Rs 6,949 crore, including Rs 809 crore collected on import of goods.
GST collection had remained above the Rs 1 lakh crore mark for eight months in a row and was Rs 1.02 lakh crore in May.
“The easing of lockdowns and increased pace of vaccinations will pull up the demand and supply vectors in the coming months, that may again support the tax collections above 1 lakh crore,” Rajat Mohan, senior partner, AMRG & Associates said.
Rajat Bose, partner, Shardul Amarchand Mangaldas & Co. said “the collections are lower than expected. It is probably because of the complete or partial lockdown imposed by most of the states. Given that the 2nd wave is behind us, we should see a rebound in the collection figures for the coming months”.
Icra chief economist Aditi Nayar said despite declining to a 10-month low, the June collections provided a positive surprise. “Overall, the GST collections in the first quarter are nearly twice as high a year ago, highlighting the narrower impact of the state-wise restrictions necessitated by the second wave of Covid-19, as compared to the stringent nationwide lockdown last year. ”
“This will buffer the revenue situation of the Centre and the states, which should support a ramping up of expenditure going ahead,” Nayar said.
Deloitte India senior director M.S. Mani said while the collections are lower than Rs 1 lakh crore which had become the norm for the past few months, considering the fact that it relates to transactions in May which was badly impacted by the pandemic, it would be considered as a very satisfactory collection.”
EY tax partner Abhishek Jain said “the collections are for the supplies made in May, where several parts of the country were under the lockdown, so this dip is on the expected lines. With significant relaxations in lockdown and business supplies picking up, the collections should see a definite uptick in the coming months.”