The Coronavirus has already taken the stock markets, Indian businesses, and the consumer sentiments for a ride! The GST collections have their share as the March 2020 collections recorded a five-month low. April 2020 is most likely to follow this path by further going down. It is believed to be recording a flat 40% drop compared to its previous month.
A senior Ministry of Finance official has opined that India’s lockdown over the last one month has severely stalled the movement of most of the goods. With the entire April 2020 experiencing a shutdown, he also lamented that so far, the April collections stand at 20% of the mop-up in the last month.
India’s GST collections in March 2020 fell 8.4% year-on-year basis to Rs 97,597 crore. The payments generally done towards year-end has been affected by the pandemic. A general trend suggests the collections in March and April of a year to be much higher compared to the rest of the months.
The full impact of the lockdown can be pictured in the GST collections of April 2020 and May 2020. Most of the goods and services, except for the home essentials, have not been in operation. There is barely anything moving, and hardly any supply taking place, except the transportation and telecom and banking.
The official interviewed by the online publication Congencis has claimed that for Q1 of 2020-21, the total GST collections are probably going to be only half of the mop-up ideally garnered for any three months of a given financial year. In other words, expectations are rife that we will earn a month and a half’s worth of our standard GST collections. The corresponding quarter in the last year had registered a Rs 3.14 trillion GST revenue.
While there is mostly a null consumption service activity in the market, all the essential goods, falling in the GST rate bracket of 0% or 5%, continue to be in demand. Since GST is a consumption-based tax, collections will see a considerable shortfall. The 2020-21 Budget has pegged the Centre’s share in GST collections during the current fiscal at Rs 6.91 trillion.
The next GST Council meeting will mostly be held before June 2020 ends. “The officials have been debating on the issue of holding a GST Council meeting, but states have been busy with the COVID-19 situation. Hence, we suggest one meeting before June-end,” the official quoted.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.