New Delhi, Oct 24, 2020: Goods and Services Tax (GST) collections, a barometer of economic health, are expected to exceed Rs 1 lakh crore in October for the first time in eight months since the coronavirus disease (Covid-19) pandemic gripped India and forced a national lockdown, according to two officials with direct knowledge of the situation.
Available data show that GST revenue accruals in the month have been robust as more businesses emerged from the lockdown, economic activity gained greater momentum and the festive season gave a fillip to household consumption, the officials said on condition of anonymity.
Going by the filing of GST returns, the indirect tax collection in October “could be in excess of Rs 1 lakh crore,” one of the officials said. That’s going by returns filed through GST form number 3B (GSTR-3B), a monthly summary of transactions filed by taxpayers by October 20, the last date for filing of GST returns for the previous month. Over 1.1 million GSTR-3B returns had been filed by October 20 compared to 485,000 by the same day last year, the first official said.
That’s good news for the government, which is borrowing Rs 1.1 lakh crore to compensate states for a part of the estimated Rs 2.35 lakh shortfall this fiscal year in their share of revenue from GST.
The Covid-19 disease outbreak forced a 68-day hard lockdown starting on March 25, which forced the temporary closure of manufacturers and service providers in all sectors but those deemed essential. These were gradually loosened.
Tax collections rebounded for the first time since March in September with a modest 4% y-o-y increase Rs 95,480 crore.
The second official cited above said revenue collections are also expected to increase because of improved enforcement systems such as e-invoicing and use of AI to check revenue leakage. The government introduced the e-invoicing system on October 1 for businesses having an annual turnover of more than Rs 500 crore a year; by January 1, the turnover threshold may be reduced to Rs 100 crore.
courtesy: Hindustan Times