The goods and services tax collection stood at Rs 1.02 trillion in May compared with a record high of Rs 1.41 trillion in April and Rs 1.24 trillion in March
Dilasha Seth |
Last Updated at June 5, 2021 23:53 IST
With the economic activity disrupted due to the second Covid-19 wave, the goods and services tax (GST) collections moderated to an eight-month low in May but remained over the Rs one trillion mark for the eighth straight month owing to tightened compliance measures.
The goods and services tax collection stood at Rs 1.02 trillion in May compared with a record high of Rs 1.41 trillion in April and Rs 1.24 trillion in March, data released by the ministry of finance showed on Saturday. These GST figures pertain to transactions done in April, but collected in May. The collections in May are 65 per cent higher than the corresponding month of last year when the country was under an intense national lockdown.
The collections are expected to go below the Rs one trillion mark in June as e-way bill generation, which indicates supply in the economy, declining to a one-year low-level average of 1.2 million per day in May.
“The above figure includes GST collection from domestic transactions till June 4 since taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed return filing for 15 days for the return filing month May’21 in the wake of Covid-19 pandemic second wave,” said ministry of finance in a statement. It added that the GST revenues have exceeded Rs 1 trillion for the eighth month in a row, despite the fact that most of the States have been under strict lockdown due to the pandemic.
While the taxpayers with turnover above Rs 5 crore had to file their returns by June 4, which they would have otherwise filed by May 20. smaller taxpayers with turnover less than Rs 5 crore still have time till the first week of July to file the returns without any late fee and interest. Revenue from these taxpayers is deferred till then. “The actual revenues for the month of May 2021, thus would be higher and would be known when all the extended dates expire,” the finance ministry said.
During the month, revenues from import of goods are 56 per cent higher and the revenues from the domestic transaction (including import of services) are 69 per cent higher than the revenues from these sources during the same month last year
Key segments of GST collections yielded less in May compared to April.
For instance, Central GST collections stood at Rs 17,952 crore as against Rs 27,837 crore in April. State GST mop was Rs 22,653 crore as against Rs 35621 crore in April. However, compensation cess was only slightly lower at Rs 9,265 in May compared to Rs 9,445 crore in April.
In addition, the government has also done a regular integrated GST settlement of Rs 15,014 crore to CGST and Rs 11,653 crore to SGST.
Rajat Bose, Partner, Shardul Amarchand Mangaldas said that the collections for the month of May are higher than expected. “Though most of the businesses were not functioning in the month of April due to the lockdown, the numbers come as a pleasant surprise. The numbers should rise further considering that many small businesses are yet to file their returns considering the Covid-19 related relaxations extended by the government for such businesses,” he said.
MS Mani, Senior Director, Deloitte India said that a close watch is required on the next month’s collections to determine the extent of the impact on GST collections FY22.
The government has been managing robust GST collections due to tightened enforcement through closer monitoring against fake billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems, and effective tax administration. Easier compliance also encouraged return filing.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.