With economic activity shackled in May across the country because of local lockdowns, Goods and Services Tax (GST) collection in June dipped to ₹92,849 crore. Finance Ministry data put out on Tuesday showed the mop-up dropping below ₹1-lakh crore for the first time in nine months.
“The GST collection for June relates to the business transactions made during May. During May, most of the States/UTs were under either complete or partial lockdown due to Covid-19. Data show that during the month, 3.99 crore E-way bills were generated compared to 5.88 crore in April, down by more than 30 per cent,” the Ministry said in a statement.
The Ministry expects July collections will be better. Experts also echo this and are unsurprised by the June number.
Road to recovery
According to the Ministry, with the Covid caseload dipping and easing of lockdowns, 5.5 crore E-way bills were generated in June, indicating recovery of trade and business. The daily average E-way bill generation for the first two weeks of April was 20 lakh, which came down to 16 lakh in the last week of that month and further to 12 lakh in the May 9 and 22 weeks. Thereafter, the average E-way bill generation rebounded to the 20-lakh level since the week beginning June 20. Therefore, “it is expected that while GST revenues dipped during June, they will rise again from July onwards,” the Ministry said.
Normally, taxpayers are required to file monthly returns by the 20th of the following month and the overall collection data is released on the first day of the next month. Due to the pandemic, taxpayers were given various reliefs including waiver/reduction in interest on delayed return filing for 15 days. Similar arrangement was made for May return filing. That is why the collection figures are up to July 5.
Commenting on the GST collection, MS Mani, Senior Director, Deloitte India, said: “While the collections are lower than the ₹1 lakh crore norm of the past few months, considering that they relate to May, which was impacted by the pandemic, they can be considered very satisfactory. These numbers also reflect the economic resilience shown during the pandemic’s second wave.”
Rajat Bose, Partner with Shardul Amarchand Mangaldas & Co, said: “Given that the second wave is behind us, we should see a rebound in the collection for the coming months.”