Despite a 31 per cent drop in Gross Direct Tax (GST) collection, a recent rise in daily e-way bills has indicated a possible recovery in the economy.
The GST data which can also be considered a proxy for consumption in the economy has shown a moderate recovery in spite of the contraction in manufacturing activity for the third straight month in June. The government, both at the Centre and the states together collected ₹90,917 crore as GST in June, which signals a pick up in demand after-tax revenues crashed in the previous two months in the face of an unprecedented shutdown.
During the first two months of the quarter ending June, the central government had imposed a stringent nationwide shutdown to contain the coronavirus pandemic and only limited operation of essential economic activities. This resulted in a severe slump in revenue collection. The shortfall in June 2020 is about 10 per cent less against the normal ₹1 lakh crore collected in June 2019.
Of the ₹90,917 crore gross GST revenue collected in June 2020, the total revenue earned by the central and state governments after the settlement of IGST stands at ₹32,305 crore and ₹35,087 crore respectively. Cess collected during the month was ₹7,665 crores, including ₹607 crores collected on import of goods, according to a statement released by the Finance Ministry.
According to data released over the weekend, the last day of Unlock 1.0 on June 30 ended with the generation of 1.83 million e-way bills, which is the highest number of daily bills generated since the lockdown was enforced in March 2020.
E-way bill is required to be generated by a registered GST taxpayer for the movement of goods if the value of the consignment exceeds ₹50,000 for inter-state movement. The normal extent of e-way bill generation before the shutdown used to be around two million a day, but had plunged after the lockdown was enforced. In fact, on March 25, the day the shutdown was announced, the steepest fall ever in e-way bill was recorded – around 49,000 bills in a single day. As shutdown restrictions were eased over subsequent lockdowns, the number has seen a sharp rise in the months of May and June.