Most probably, India’s Fiscal Exchequer from Goods and Services Tax (GST) collections is likely to recover from July onwards after witnessing a fall in May and June as per the official data related to ‘one-way bills’ for the first fortnight of the month of June. The data connotes the gradual comeback of economic activity that is in line with a fall in coronavirus cases and the easing of lockdown curbs.
As per the Data released by GSTN, the company that processes tax returns, the average GST e-way bills generated this month till June 13 were 1.61 million that is 25% more than the daily average reported for the month of May.
Furthermore, the facts and figures also implied a reversal of the sequential decline that is observed in April and May after reaching a peak of 2.29 million average daily e-way bills that were reported in March.
However, The data on increasing goods transportation is inspiring as the policymakers are betting on the vanishing of the second wave of the pandemic along with the easing of mobility restrictions by states for the purpose of economic recovery and employment generation.
Adding further, as taxes are being paid a month after sales, the upsurge in electronic goods transportation permits as observed in June could translate into better GST revenue collections in the month of July. Contrarily, this month’s tax collections achieved so far is at a moderate level that is in line with the decrease in e-way bill generation in the month of May.
As per Rajesh Gupta, chief technology officer and co-founder of BUSY Infotech Pvt. Ltd, the second corona pandemic, which has led to moderation in the generating e-way bills in the month of April and May, has made a heavy toll that is based on several sectors that include retail and transportation also.
The GST collections of the Central and State Governments were Rs1.02 trillion in May and Rs 1.41 trillion in April. The think tank of the industry has attributed the high GST receipts in April to a blend of factors that includes high commodity prices. Another reason being the fact that the businesses are putting in efforts to finish the inventory in the last month of Financial Year 2021.
With the passage of time, as the mobility restrictions are eased, prediction of promising monsoon and favourable vaccination policy, many analysts have made a prediction that economic growth shall recover and gain momentum in the forthcoming months.
Nevertheless, the share of pent-up demand might be less than what was witnessed last year due to stringent lockdown in the past year along with higher healthcare and fuel expenses.
