March GST revenue drops below ₹1 lakh cr.

Goods and Services Tax (GST) collections for March 2020 stood at ₹97,597 crore, dropping below the ₹1 lakh-crore mark after four months.

Gross GST revenue for the month was 8% lower than that of March 2019, according to Finance Ministry data released on Wednesday.

For the full financial year 2019-20, gross GST collections grew 4% in comparison to the previous year.

As the March revenue collections are based on the business conducted in February, these figures do not take into account the full impact of COVID-19 and the consequent shutdown of many business sectors in India. Analysts warn that next month’s revenues are likely to dip much further.

Although GST revenue from domestic transactions dropped 4% in comparison with March 2019, there was a 23% fall in the tax collected on import of goods. “Global trade was affected by COVID-19 in February itself, so we could be seeing the result of that,” said Sachin Menon, national head, indrect taxes, KPMG in India.

There has also been a sharp 7% decline in the filing of February GSTR-3B returns, with only 76.5 lakh returns being filed till March 31 in comparison with the more than 83 lakh filed in the previous two months. “It seems that many businesses may not have been able to pay GST because of the liquidity issues being faced after the lockdown,” said Pratik Jain, partner and indirect tax leader at PwC India.

The situation is likely to worsen. “With most businesses being non-operational for a considerable period in March and the relaxation of delayed payments allowed, collections in the coming quarter would see quite a fall,” said Abhishek Jain, tax partner at Ernst and Young. Small businesses have been allowed a three-month deferment of GST payments due to the COVID-19 situation, and there is a wider industry demand for a moratorium on payments and reduction in rates.

“At this stage, it is necessary for businesses to conserve cash in order to enable resumption of operations once the lockdown ends. Any deferral of the GST payment timelines by a few months would significantly assist them in this process,” said M.S. Mani, partner, Deloitte India.

Of the total collections, central GST stood at ₹19,183 crore, State GST atwas ₹25,601 crore and integrated GST atwas ₹44,508 crore. Cess stood at ₹8,306 crore. The government had settled ₹19,718 crore to CGST and ₹14,915 crore to SGST from IGST as regular settlement. In addition, the Centre also apportioned unsettled balance IGST of ₹6,000 crore on an ad-hoc basis in a 50:50 ratio between the Centre and States.

Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Sep 21, 2022 10:47:22 pm |