New Delhi: India entered the fourth year of the highly debated Goods and Services Tax, or GST, on Wednesday and posted a 46 per cent jump in June as businesses opened their shutters finally after a 3-month-long coronavirus lockdown. However, the overall GST collections for the first quarter of 2020 – April to June – witnessed massive drop of 41 per cent as compared to the Rs 3.14 lakh crore collected this time last year.Also Read - GST Return Filing Deadline Extended! Here's New Date
The Union Finance Ministry released the tax revenues data today, showing a clear indication for the first time since March when the lockdown was imposed due to COVID-19 outbreak. Also Read - GST Exemption on Vaccines, COVID-19 Drugs Would Make them Costlier: FM Nirmala Sitharaman
“The revenues during the financial year has been impacted due to 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,” the ministry said in an official statement. Also Read - Petrol, Diesel Can't Be Brought Under GST For Next 8-10 Years, BJP MP Sushil Modi Tells Parliament, Explains Reasons
It must be noted that the GST collections had crashed 72 per cent to just Rs 32,294 crore in April, while the contraction had narrowed to 38 per cent in May in comparison to the previous year, with collections of Rs 62,009 crore. At the same time, June’s GST mop-up stood at Rs 90,917 crore, only 9 per cent lower than in June 2019.
Abhishek Jain, Tax Partner at Ernst and Young India spoke to PTI and said, “The GST collections while in the first quarter have obviously witnessed a substantial dip because of the current pandemic, however, the increasing trend in June inclines to a recovery being in line soon.”
“With this shortfall and related dip in revenue for states as well, the Centre’s obligations to compensate States for any shortfall is an area of concern and this being further deepened with muted compensation cess collections,” he said.
Finance Minister Nirmala Sitharaman had earlier extended the deadline till June 30 for taxpayers who could not file their returns for May 2020 due to the lockdown. The finance ministry noted that some returns that would have been filed in June itself, will be instead filed in the first few weeks of July.
While economy experts had predicted a standstill for businesses that were already guttering due to the economic slowdown, the improvement in the month of June indicate a revival and a hope that the numbers will increase in the coming months.