Lockdown Losses: GST mop-up slips to Rs 93,000 crore in June

The GST mop-up of June 2021 was nonetheless 2% larger than that in the identical month final yr, which belonged to transactions in Might 2020, which noticed really fizzling out of full nationwide lockdown.

Gross items and companies tax (GST) collections, after remaining above the Rs 1-lakh-crore mark for eight months in a row, got here in at Rs 92,849 crore in June (Might transactions), reflecting the blow to the economic system from a just about pan-India lockdown.

The federal government, nevertheless, mentioned because of discount in Covid-19 case numbers and easing of the lockdowns, e-way payments era by companies rose to five.5 crore in June, from 3.99 crore in Might, indicating a wise restoration of commerce and enterprise. About 5.9 crore e-way payments have been generated in April.

Gross receipts had are available at `1.03 lakh crore in Might, markedly decrease than the file Rs 1.41 lakh crore mopped up within the earlier month.

Different high-frequency indicators out there for June level at a blended bag. Whereas each manufacturing and companies PMI shrank essentially the most in 11 months in June, exports jumped 47% from a yr earlier than and 30% from the pre-pandemic (similar month in 2019) degree. With the impression of the second Covid wave waning and vaccination drive making progress, some components of the economic system could begin wanting up from July. Nevertheless, no substantial restoration is seen earlier than September when producers sometimes begin to inventory as much as cater for festive demand, thus boosting financial output.

In current months, the federal government’s GST income has been strong, because of steps taken to curb evasion, elevated compliance and likewise a shift of enterprise away from the casual sector. A nascent financial restoration that seems to have been rapidly disrupted by the pandemic’s second surge, additionally helped.

For the second yr in a row, the Centre will borrow beneath a particular, comparatively low-cost mechanism in 2021-22 to bridge a yawning shortfall within the GST compensation cess pool and switch the funds to states as back-to-back loans, sans any large fiscal value to states.

Whereas the quantity borrowed beneath the RBI-enabled mechanism final yr was Rs 1.1 lakh crore — there was nonetheless a shortfall, Rs 60,000-70,000 crore in opposition to the 14% annual income progress assured to states — the thought is to borrow some Rs 1.58 lakh crore in 2021-22.

The GST mop-up of June 2021 was nonetheless 2% larger than that in the identical month final yr, which belonged to transactions in Might 2020, which noticed really fizzling out of full nationwide lockdown.

Of the June mop-up, Central GST was Rs 16,424 crore, state GST Rs 20,397 crore and I-GST Rs 49,079 crore (together with Rs 25,762 crore collected on import of products) and cess proceeds of Rs 6,949 crore (together with Rs 809 crore collected on import of products).

“The each day common era of e-way invoice for the primary two weeks of April 2021 was 20 lakh, which got here right down to 16 lakh in final week of April 2021 and additional to 12 lakh within the two weeks between Might 9 to 22. Thereafter, the typical era of e-way payments has been rising and has reached once more to twenty lakh degree because the week starting June 20. Subsequently, it’s anticipated that whereas the GST revenues have dipped in the course of the month of June, the revenues will see a rise once more July 2021 onwards,” the finance ministry mentioned in an announcement.

The ministry mentioned GST collections reported for June included assortment from home transactions between June 5 to July 5 since taxpayers with turnover as much as `5 crore got numerous reduction measures within the type of waiver/discount in curiosity on delayed return submitting for 15 days for the return submitting month June, within the wake of the second wave of the Covid pandemic.