India’s Gross GST revenue fell to ₹1.02 lakh crore in May, from a record ₹1.41 lakh crore in April, but the number was likely to be revised upwards, the government said on Saturday.
The May collections, broadly pertaining to transactions in April, are the lowest since September 2020, which recorded a revenue of ₹95,480 crore.
Economists expect the collections to dip further in June even though the current lockdowns across States may not be denting activity as much as last year’s national lockdown.
“The moderation in GST inflows was expected as evident in the sequential slowdown in e-way bills between March and April. With the extension and widening of restrictions by various States in May 2021, the generation of e-way bills have declined further, which will further dampen GST collections in June,” said ICRA chief economist Aditi Nayar.
The ₹1,02,709 crore collected in May includes revenues from domestic transactions till June 4. This is 65% higher than May 2020, when just ₹62,151 crore was received amid the national lockdown that began in late March 2020.
“The actual revenues for the month of May 2021 would be higher and would be known when all the extended (compliance) dates expire,” the Finance Ministry said in a statement, citing the relaxations given to taxpayers in filing returns in the wake of the second wave of COVID-19.
“…While the taxpayers with turnover above ₹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 ₹5 crore still have time till first week of July to file the returns without any late fee and interest and the revenue from these taxpayers is deferred till then,” it explained.
The GST collections of over ₹1 lakh crore indicated that the economic impact of the lockdowns had been much lower than expected, said MS Mani, senior director at Deloitte India. “A close watch is required on the next month’s collections to determine the extent of the impact on GST collections for 2021-22,” he noted.
‘A good performance’
EY tax partner Abhishek Jain said May’s GST collections represented a good performance amid ‘the aggressive second COVID-19 wave’. The revenue would increase once all businesses filed returns for the relevant period, by the July first week, he added.
The Finance Ministry said this was the eighth month in a row that the GST revenues had crossed ₹1 lakh crore mark ‘despite the fact that most of the States have been under strict lockdowns due to the pandemic’.
Integrated GST accounted for over half of May’s collections at ₹53,199 crore, with ₹26,002 crore collected on import of goods. Compensation Cess added another ₹ 9,265 crore, which included ₹ 868 crore on import of goods.
