GST collection drops for second month in Aug to ₹86,449 Cr

The GST collection declined for the second consecutive month in August to ₹86,449 crore, the Finance Ministry said on Tuesday (September 1).

On year-on-year basis, the August collection was 12 per cent lower compared to ₹98,202 crore mopped up in the same month last year.

Of the gross collection, Central Goods and Services Tax (CGST) stood at ₹15,906 crore, State Goods and Services Tax (SGST) ₹21,064 crore, Integrated Goods and Services Tax (IGST) ₹42,264 crore (including Rs 19,179 crore collected on import of goods) and Cess ₹7,215 crore (including ₹673 crore collected on import of goods).

Tax experts said the revenue numbers indicate that domestic economic activity is picking up and the drop in the collection is mainly due to reduced imports.

In a statement, the Finance Ministry said the government has settled ₹18,216 crore to Central GST and ₹14,650 crore to State GST from Integrated GST as regular settlement.

“The total revenue earned by Central Government and the State Governments after regular settlement in the month of August, 2020 is ₹34,122 crore for CGST and ₹35,714 crore for the SGST,” it added.

The revenues for August are 88 per cent of the GST collected in the same month last year. During the month, the revenues from import of goods were 77 per cent and the revenues from domestic transaction (including import of services) were 92 per cent of the revenues from these sources during the same month last year, the ministry said.

It further said that taxpayers with turnover less than Rs 5 crore have been permitted to file GST returns till September.

The GST collections have faltered since the beginning of the current fiscal as COVID-19-induced lockdown hampered economic activity.

The revenue in April was ₹32,172 crore, May (₹62,151 crore), June (₹90,917 crore) and July (₹87,422 crore).

PwC Leader (Indirect Tax) Pratik Jain said the trend in the last couple of months show collections seem to have stabilised at around 10 per cent lower than corresponding month last year.

“As things are opening up gradually, the collection is likely to be progressively better in coming months,” Jain said.

Deloitte India Partner M S Mani said the collections are on the recovery path and GST collections on domestic transactions just 8 per cent lower than the same month last year indicate revival of economic activities.

“The state-wise data of GST collections indicates that the revival process has resulted in marginal collection increases in some states like Rajasthan and UP, marginal reductions in states like Haryana and Gujarat with significant dips in Maharashtra, Karnataka and Tamil Nadu,” Mani said.

EY Tax Partner Abhishek Jain said a significant part of the dip is attributable to imports, which has witnessed a decline as a result of reduced international trade.

“Also, domestic collections having attained 92 per cent year-on-year for operations in July is a sign of economic recovery post upliftment of lockdown,” he added.

HostBooks Chairman and Founder Kapil Rana said: “The GST collection data demonstrates two things – domestic consumption is strongly overcoming the effect of the pandemic, secondly, people are showing more reliance on domestic products, which is pushing the domestic consumption hence the revenue collection”.