CGST Collection Dropped 87% in April 2020 Due to COVID-19

According to some data revealed recently, The CGST collection for April month was reported Rs 5,934 crore which is 87% less as compared to the same month last year’s collection (Rs 46,848). The Official data is concerned with the month of March in which only a few days are under lockdown. Some analysts also expressed that the collection of Central Goods and Service Tax (CGST) Get the brief introduction of SGST, IGST and CGST. We have mentioned their full forms, meanings and adjustments of input tax credit under GST in India could be much lower for April Month.

The Central goods and services tax (CGST) is levied by the Central Government on the intra-state supply of goods and services. Lockdowns, deferment of payments, and return filing during March April are the main reasons behind these low percentages.

Data also clarifies that reducing the GST collection is not possible because the State GST is higher than the CGST. The CGST collection was reported Rs 19,183 crore whereas the SGST collection was reported at Rs 25,601 crore in March 2019-2020. The budget was estimated at Rs. 5.8trillion for the ongoing financial year. So for it around Rs. 48,333 in a month will be required on average. However, due to the Lockdown caused due to COVID-19 Panadamic the estimated budget is now outdated.

Abhishek Jain, a tax partner in EY stated that ”the due date of GST collection for activities in March was April 20. However, as part of the Covid-19 relief measures, the government had offered a 15-day interest-free grace period till May 5. “It seems, many taxpayers have opted for the grace period and hence the low collections, the larger impact was expected to be witnessed in collections for activities in April”.

However, there is an issue related to integrated GST that it is not very clear how much of IGST will be allocated to the states. Meanwhile, the IGST collection is reported at Rs 9,749 crore in the month of April. Which is somehow higher than minus Rs 564 crore in the month of April in the last year. Here minus stands for more allocation to the states compared to the overall collected by the Centre. Jain further added that “Without the final IGST settlement among states and the Centre, accurately determining the excess deficit in state GST revenues would be difficult.”.

The Central government had provided some relaxation and announced earlier that GST taxpayers who are registered and having aggregate turnover less than Rs 5 crore annually can also file GSTR-3B GST council decided GSTR 3B filing until March 2019 in the 27th meeting. We researched and published some interesting points that why Indian government extended GSTR 3B every time?. and pay applicable taxes which are due in March, April, or even in May month till last week of June 2020. Thus taxpayer can Pay the GST and file GSTR-3B till the Last week of June 2020 without paying interest, penalty, late fee. Additionally, taxpayers with annual turnover above Rs 5 crore can also pay taxes till May 5 which are due in March month. These extensions in dates will not attract any interest. But if the taxpayer failed to pay the taxes before this extension period (June 30) then an additional 9% interest will be levied. This said interest rate is exactly half of the current rate.