GST Report Card : April 2020

(Indicative)

Nationwide trend in generation of e-way bills shows a sharp drop in GST collection. Trade and businesses generated close to 67 lakh e-way bills between April 1 to 27, as against the 4 crore e-way bills generated in March 2020, according to Goods and Services Tax Network (GSTN) portal.

"We have seen 80 per cent drop in our revenue in the month of April," Assam Finance Minister Himanta Biswa Sarma said.

Experts say hilly states would be worst affected as they earn a vast majority of their revenue from tourism and hospitality.

States' own taxes levied on items such as diesel, petrol and liquor constitute 30-50 per cent of the total revenue. As sale of liquor is not allowed during lockdown and cargo movement by road is very limited, states are expected to be hit hard on these revenues as well.

While minimal business activity is the key reason for low collection, many small businesses are learnt to have deferred tax filing in view of looming uncertainty and the need to conserve cash. It may be noted that government has extended the deadline for filing GST returns due in March, April and May for small businesses with annual sales of less than Rs 5 crore to June 2020.

Assam Finance Minister Sarma, however, termed April collection trend as aberration as people stayed inside their homes in the wake of coronavirus outbreak. Further, he said that finances of various states would come under stress but degree of severity would vary depending on expenditure towards containing the spread of the deadly virus and expenses incurred on supporting migrant workers.

Assam had mopped up Rs 932 crore in the month of March 202, however, April collection is closer to Rs 200 crore instead.

West Bengal and Andhra Pradesh have also seen GST collection crash 80-90 per cent in April. A source in West Bengal tax department said that the state may not be able to reach even Rs 300-350 crore mark compared to its March 2020 collection of Rs 3,582 crore.

A senior GST officer in Andhra Pradesh government said that the state's collection had dropped 90 per cent in April as service sector was totally closed. Andhra Pradesh had collected Rs 2,548 crore in GST during March 2020.  

Fall in e-way bills also indicated a significant reduction in economic activity. Services sector, which accounts for 60 per cent of the GDP has almost stopped, resulting in sharp fall in tax collection. Manufacturing sector which contributes nearly 23 per cent of the GDP has also come to a grinding halt barring essential items such as processed food and pharmaceuticals.

Source: BusinessToday

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