‘GST Collection Dips as Lockdown Impacted Supply Chains & Business Continuity’
On Tuesday, official data showed that India's gross GST revenue collection fell below the psychological mark of Rs 1 lakh crore for the first time this year, clocking Rs 92,849 crore in June 2021, as collections fell due to disruptions caused by the fresh wave of Covid-19.
The latest dip in GST collection has come on the back of supply chain disruptions caused due to regional lockdowns, experts opined.
On Tuesday, official data showed that India’s gross GST revenue collection fell below the psychological mark of Rs 1 lakh crore for the first time this year, clocking Rs 92,849 crore in June 2021, as collections fell due to disruptions caused by the fresh wave of Covid-19.
Though the GST revenues during June 2021 are lower than the over Rs 1 lakh crore collections recorded in the previous month and a record Rs 1.41 lakh crore collection made in April, it is still a growth over June 2020 collections when GST numbers had remained low due to the first set of lockdowns.
“The collections are for the supplies made in the month of May, where several parts of the country were under the lockdown, so this dip is on the expected lines,” EY India Tax Partner Abhishek Jain said.
“With significant relaxations in lockdown and business supplies picking up, the collections should see a definite uptick in the coming months.”
ICRA Chief Economist Aditi Nayar said: “While the GST collections did ease in June 2021 relative to the previous month, the pace of the moderation was muted as compared to the extent by which the GST e-way bills had fallen in the corresponding period (May 2021 vs April 2021) as the state level restrictions had widened.”
“Despite declining to a 10-month low, the June 2021 GST collections provided a positive surprise.”
As per the official data, the gross GST revenue collected in the month of June is Rs 92,849 crore of which CGST is Rs 16,424 crore, SGST is Rs 20,397, IGST is Rs 49,079 crore (including Rs 25,762 crore collected on import of goods) and cess is Rs 6,949 crore (including Rs 809 crore collected on import of goods).
In this period, the government settled Rs 19,286 crore to CGST and Rs 16,939 crore to SGST from IGST as regular settlement.
“The fall in GST collections was expected in May amid more broad-based localised lockdowns with the e-way bill data already reflected a more than 30 per cent fall m-on-m in May,” Emkay Global’s Lead Economist Madhavi Arora said.
“But despite moderation in May, the GST collections have not totally collapsed, depicting softer impact on activity and supply chains with no restrictions on inter-state movement in Covid-II. Of course, better compliance and higher commodity inflation helped as well.”