April GST Collection Estimated to Reach Only 40% of March Revenue

Nationwide lockdown that was announced due to increasing cases of COVID-19 in India has adversely affected revenue collections of April. As per the data, GST collected for the month of April is estimated to reach only 40% of the aggregate collection recorded in March this year as the entire Indian economy has come to a halt. Looking at the increasing cases of corona positive patients in India the center decided to extend the lockdown till 3 May 2020 and the same was announced on 14 April 2020. Till now the aggregate collection for the month of April stands at only 20% of the total revenue GST collection in March The lock-down of offices, shops and other businesses due to the outbreak of coronavirus will affect the GST collections for March and April. Read More, said one of the officials from the Finance Ministry.

The contribution to the national treasury for the month of March also dropped by 8.4% on year to 975.97 bln rupees as the tax payments were severely affected by the COVID-19 pandemic. Prior to March, the revenue collection touched a 1 trillion mark for consecutive five months. It was for the 1st time in 5 months that the collection stood below 1 trillion. On the contrary, the GST revenue for the months of March and April were expected to be higher than all the other months in the year. The official further stated that the effect of the pandemic is yet to be seen in the revenue collection of April and May 2020 as the lockdown is still prevalent. The service sector is completely stagnant as there is no supply going on, no transportation is allotted, no telecom, and no banking.

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For consumption services, nothing is there. Goods taxed at NIL or 5% GST are only movable, said the official. He further stated that the GST for the first quarter of the Fiscal Year 2020-21 is estimated to be half of the expected GST accumulation for the three months of the given fiscal year. In FY 2019-20, the overall revenue generated by the government from Jan to March was 3.14 trillion rupees, as stated by the officer. Paying heed to the current spread of three months, the collection is worth 1.5 months of the previous year i.e. 50% on an average. April, May, June would be half of what we get usually,” the official said.

As stated by the officer, GST is a consumption-based tax and therefore we are witnessing the considerable drop in the collections of FY 2020-21. The union budget understood the Center’s GST collection to be 6.91 trillion rupees for the current Financial Year. The GST penal is expected to hold a meeting at the end of June 2020. Amid the chaos caused due to COVID-19 and lockdown, the state and center are well occupied and therefore the panel has landed on the decision to hold the meeting in June end, said the official.