‘April GST mop-up may be at 40% of March collection on lockdown’

‘April GST mop-up may be at 40% of March collection on lockdown’

AgenciesUpdated: Friday, April 24, 2020, 07:07 AM IST
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Mumbai: The goods and services tax collections in April is likely to be 40% of that in March as the nationwide lockdown on account of the coronavirus pandemic has stalled movement of almost all goods and services, a senior finance ministry official said.

The Centre on Apr 14 announced the extension of the nationwide lockdown to May 3 to curb the spread of coronavirus in the country. The official also said that GST collections so far in April stands at 20% of the mop-up in March.

India's GST collections in March declined 8.4% on year to 975.97 bln rupees as yearend payments were most likely impacted by the coronavirus pandemic. This was the first time in five months that GST collections had gone below the 1-trln-rupee mark. Typically, collections in March and April tend to be much higher than in other months.

However, the official said, the full impact of the lockdown will be reflected in the GST collections for April and May as most goods and services, barring those which are essentials, have not been functioning. "Services there is hardly anything moving, hardly any supply happening, barring transportation and telecom and banking.

On consumption services, nothing is there. In terms of goods, only essentials in the bracket of 0%, or 5% GST rate are moving," the official told Cogencis. The official said, during the first quarter of 2020-21 (Apr-Mar), total GST collections are likely to be only half of the mop-up typically garnered during three months of a given financial year.

In the previous financial year, the government collected 3.14 trln rupees as overall GST collections during Jan-Mar, as per official data. "So, for three months, we expect to get 1.5 months’ worth of our normal GST collections. If I look at the spread in three months, we will get 1.5 months’ worth of revenues that is 50% on an average.

April, May, June would be half of what we get usually," the official said. The overall GST collections in AprJun of 2019-20 came in at 3.14 trln rupees, as per official data. According to the official, since GST is a consumption-based tax, collections for 2020-21 is likely to see a huge shortfall. The Budget for 2020-21 has pegged the Centre's share in GST collections during the current fiscal at 6.91 trln rupees.

The next GST Council meeting is likely to be held by the end of June. "We have been debating on the issue of holding a GST Council meeting, but states have been busy with the COVID-19 situation. As it is, we will hold one meeting before June-end," the official said.

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