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GST collection
GST collections hit record high of Rs 1.24 lakh crore in March

GST collections hit record high of Rs 1.24 lakh crore in March

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GST collections rose 27% to hit a record high of nearly Rs 1.24 lakh crore in March, helping to narrow the deficit for the full financial year to around 7%.

The mop-up — based on sales in February 2021, for which returns were filed in March — was boosted by imports with revenue from imported goods jumping 70%, while those from domestic transactions, including services imports, were 17% higher than the corresponding period in 2020.

The impact of the coronavirus pandemic was first seen in February 2020 when the lockdown in Wuhan resulted in a disruption of shipments coming from China, where the deadly virus was first spotted.

“GST revenues crossed above Rs 1 lakh crore mark at a stretch for the last six months and a steep increasing trend over this period are clear indicators of rapid economic recovery post pandemic. Closer monitoring against fake billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue over last few months,” the finance ministry said in a statement.

Although the base effect will come into play in the coming months, there has been a sustained recovery with collections rising 14% during the March quarter compared to 8% during October-December 2020. During the first half of 2020-21, GST collections had declined following the lockdown.

“It (collection growth) clearly shows a sustained economic recovery and also is a result of GST audit closures and the government tightening compliance and anti-evasion measures,” said Pratik Jain, who leads the indirect tax practice at consulting firm PwC.

What is providing even more comfort to experts is the growth in collections across all the states. “In addition to the trend of higher overall GST collections over the past six months, all major states have shown a significant increase compared to the previous year. Further the increase in collections on imports accompanied by the increase in domestic transactions would indicate that the overall production/consumption cycle is back to normal,” said MS Mani, senior director at Deloitte India.

Source: Times-Of-India.

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GST collection
February 2021 GST collection at Rs 1.13 lakh crore: Finance ministry

February 2021 GST collection at Rs 1.13 lakh crore: Finance ministry

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The GST collection in February this year stood at Rs 1.13 lakh crore, according to the data released by finance ministry on Monday.

This is the fifth straight month of the GST collection exceeding the Rs 1 lakh crore-mark. The current mop-up is an increase of 7 per cent over the February collection last year.

This is a clear indication of the economic recovery and the impact of various measures taken by tax administration to improve compliance, the finance ministry

“In line with the trend of recovery in the GST revenues over past five months, the revenues for the month of February 2021 are 7 per cent higher than the GST revenues in the same month last year,” the ministry said in a statement.

“During the month, revenues from import of goods were 15 per cent higher and the revenues from the domestic transaction (including import of services) are 5 per cent higher than the revenues from these sources during the same month last year,” the statement added.

In January 2021, the GST collections had surged to all-time high of about Rs 1.20 lakh crore as economic activities picked up after the withdrawal of stringent lockdown restrictions.

Mop-up from the Goods and Services Tax (GST), which is levied when a consumable item is sold or a service such as travel booking rendered, in January was 8 per cent higher than such receipts in the same month of 2020.

In a statement, the finance ministry had said that the January 2021 collections were the highest ever since the implementation of the nationwide tax in July 2017.

The previous best was in December 2020 when Rs 1,15,174 crore was collected.

Source: Times-Of-India.

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GST collection
GST collections for Jan 2021 touch all-time high of Rs 1.2 lakh crore

GST collections for Jan 2021 touch all-time high of Rs 1.2 lakh crore

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Goods and service tax (GST) collections for January 2021 touched an all-time high of Rs 1.19 lakh crore since introduction of GST regime, the finance ministry said Sunday.

“The GST revenues during January 2021 are the highest since the introduction of GST and have almost touched the ₹ 1.2 lakh crore mark, exceeding last month’s record collection of ₹1.15 lakh crore,” the ministry said.

The consistent collections of over Rs 1 lakh crore for the last four months and a steep increasing trend over January were ‘clear indicators of rapid economic recovery’ post pandemic, the ministry added.

It attributed the continued rise in collections to closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems and effective tax administration.

The average year-on-year growth in GST revenue over the first four months in the second half of the financial year has been 8% as compared to (-) 24% during the first half of the year, the ministry added.

GST collections for January 2021 – touching the Rs 1.2 lakh crore mark – were 8% higher than last year collections of over Rs 1.1 lakh crore. During the month, revenues from import of goods was 16% higher and the revenues from domestic transactions including import of services, was 6% higher in the same period.

The gross GST revenue collected in the month of January 2021 till 6pm on January 31, 2021 stood at Rs 1,19,847 crore of which central GST was Rs 21,923 crore, state GST was Rs 29,014 crore, integrated GST was Rs 60,288 crore, which included Rs 27,424 crore collected on import of goods. Of the total collections, cess was Rs 8,622 crore which included Rs 883 crore collected on imports.

About 90 lakh GSTR-3B returns were filed for the month of December up to January 31, 2021.

The government has settled Rs 24,531 crore to CGST and Rs 19,371 crore to SGST from IGST as regular settlement.

The total revenue earned by Central Government and the State Governments after regular settlement in the month of January is Rs 46,454 crore for CGST and Rs 48,385 crore for the SGST.

Source: Economic-Times

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GST collection
Govt collects Rs 1,04,963 crore GST in November, crosses Rs 1 lakh crore mark second time since April

Govt collects Rs 1,04,963 crore GST in November, crosses Rs 1 lakh crore mark second time since April

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Goods and service tax (GST) collections for November stood at Rs 1.04 lakh crore, marginally lower than Rs 1.05 lakh crore collected in October this year, but higher than Rs 1.03 lakh crore collected in the same month last year.

The numbers showed the second consecutive month of collections clocking up more than Rs 1 lakh crore, indicating continued economic recovery, said experts.

“In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4% higher than the GST revenues in the same month last year,” the finance ministry said in a statement Tuesday.

During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) are 0.5% higher that the revenues from these sources during the same month last year, the ministry added.

“Second straight month of Rs 1 lakh plus collection is certainly indicative of continued economic recovery and the collections being slightly more same month last year is quite encouraging. This should also help in containing the shortfall of GST collections caused due to the pandemic,” said Abhishek Jain, tax partner.

Of the gross collections in November, Central GST stood at Rs 19,189 crore, State GST at Rs 25,540 crore, integrated GST at Rs 51,992 crore which included Rs 22,078 crore collected on import of goods, and cess was at Rs 8,242 crore, which included Rs 809 crore collected on import of goods.
The total number of GSTR-3B Returns filed for the month of November up to 30th November 2020 was 82 lakhs, the ministry added.

The government settled Rs 22,293 crore to CGST and Rs 16,286 crore to SGST from IGST as regular settlement. The total revenue earned by central government and the state governments after regular settlement in the month of November 2020 is Rs 41,482 crore for CGST and Rs 41,826 crore for the SGST.

A majority of states have shown an increase in GST collections, data from the ministry revealed, while nearly 15 states showing a dip in collections.

Source: Economic-Times.

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GST collection
GST collection crosses Rs 1 lakh crore mark for first time since February

GST collection crosses Rs 1 lakh crore mark for first time since February

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Goods and Services Tax (GST) collections for October grossed Rs 1.05 lakh crore, the highest so far in the financial year and 10% higher than collections in the same month last year, which stood at Rs 95,379 crore.

The growth in the numbers – crossing the Rs 1 lakh crore mark for the first time since April – showed clear signs of recovery, the department of revenue said in a statement on Sunday.

“The growth in GST revenue as compared to that in months of July, August and September, 2020 of -14%, -8% and 5% respectively clearly shows the trajectory of recovery of the economy and, correspondingly, of the revenues,” the department said.

GST collections in July, August and September this year stood at Rs 87,422 crore, Rs 86,449 crore and Rs 95,480 crore, respectively.

During October, revenues from import of goods was 9% higher and the revenues from domestic transaction (including import of services) are 11% higher that the revenues from these sources during the same month last year.

Experts said the uptick in collections of almost Rs 10,000 crore over last year showed definitive revival of consumption and festival spends across the economy.
“Some potential reasons for this surge could be the splurged demand on account of the festivities and input tax credit/ other similar reconciliations which were due for businesses in September,” said Abhishek Jain, tax partner at EY.

“Continuance of this trend will help in narrowing the fiscal deficit for FY 21 and will go a long way in reviving business confidence across sectors as the impact of the unlock process across states gets translated into GST collection figures,” said MS Mani, Senior Director, Deloitte.

Of the gross GST revenue of Rs 1,05,155 crore collected in October, the Central GST is Rs 19,193 crore, state GST is Rs 25,411 crore, integrated GST is Rs 52,540 crore which includes Rs 23,375 crore collected on import of goods and cess is Rs 8,011crore including Rs 932 crore collected on import of goods.

The government has settled Rs 25,091 crore to CGST and Rs 19,427 crore to SGST from IGST as regular settlement. The total revenue earned by central government and the state governments after regular settlement in the month of October, 2020 is Rs 44,285 crore for CGST and Rs 44,839 crore for the SGST.

The total number of GSTR-3B Returns filed for the month of October up to 31st October, 2020 is 80 lakh.

Source: Economic-Times.

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GST collection
GST revenues cross ₹95,000 crores in September

GST revenues cross ₹95,000 crores in September

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Revenue collections from the Goods and Services Tax (GST) in September hit ₹95,480 crore, the highest in this financial year so far, indicating that economic activity is picking up steam in tandem with the gradual easing of lockdown restrictions necessitated by the COVID-19 pandemic.

September’s indirect tax collections were over 10% higher than August, 4% higher than the GST kitty in the same month a year ago and marked only the second time that the ₹90,000 crore mark was crossed this financial year.

GST collections had been sliding after January 2020 when nearly ₹1.11 lakh crore came in. March 2020, by the end of which the national lockdown was imposed, recorded GST inflows of ₹97,597 crore. April and May saw the worst hit, bringing in little over ₹32,000 crore and ₹62,000 crore, respectively.

“The gross GST revenue collected in the month of September, 2020 is ₹95,480 crore, of which Central GST is ₹17,741 crore, State GST is ₹23,131 crore, Integrated GST is ₹47,484 crore [including ₹22,442 crore collected on import of goods] and cess is ₹7,124 crore [including ₹788 crore collected on import of goods],” the Finance Ministry said in a statement on Thursday.

Economists were cautious about reading the healthier numbers as a sign of a sustainable rebound from the sharp 23.9% contraction in the country’s gross domestic product in the first quarter of 2020-21.

Principal economist at rating agency ICRA Aditi Nayar said the uptick in GST collections had come as a relief, although it had likely been driven by ‘a combination of pent up demand and inventory restocking, and thus its sustainability remains unclear.’

“Overall, the high frequency data available for the month of September 2020 confirms that a fragmented recovery is under way. We continue to expect the GDP contraction to narrow appreciably to 12.4% in the second quarter,” Ms. Nayar said.

“With a significant part of the economy resuming operations and international trade as well resuming pace, the collections have shown decent growth,” said Abhishek Jain, EY tax partner. Revenues from import of goods were at 102% and revenues from domestic transactions which include import of services were at 105% of the revenues from these sources during September 2019.

Among the larger States, Rajasthan and Tamil Nadu saw the highest growth in GST inflows at 17% and 15%, respectively, compared to September 2019. Andhra Pradesh saw a 8% growth, Gujarat 6%, while Maharashtra and Uttar Pradesh saw a flat trend and collections in Karnataka dropped 5%, from a year ago.

Source:The-Hindu.

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gst-compensation
Entire GST shortfall will be compensated, says Centre

Entire GST shortfall will be compensated, says Centre

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States and Union Territories will get full compensation for the shortfall in GST collection this year, the Centre reiterated on Monday. It made it clear that it will be irrespective of the fact whether the shortfall is on account of GST implementation or on account of the Covid pandemic. “It has never been the stand of the Union Finance Minister that the loss of revenue due to Covid would not be compensated. The Central government has, time and again, committed that the entitlement of the States would always be for full compensation. The entire compensation on account of the shortfall in collection of GST will be paid and honoured,” a senior Finance Ministry official said.

Total GST revenue shortfall during FY 2020-21 is estimated at ₹3-lakh crore. Since collection through the compensation cess is likely to be ₹65,000 crore, the net shortfall could be ₹2.35-lakh crore. Out of this, based on 10 per cent nominal growth and other assumptions, the shortfall on account of GST implementation and pandemic are ₹97,000 crore and ₹1.38-lakh crore, respectively. The Centre has proposed two options for States – borrow ₹97,000 crore through a special window or borrow the entire ₹2.35-lakh crore from the open market.

According to sources, working out revenue shortfall on account of GST implementation is just a mechanism to assess how much of the shortfall should be met by borrowing and how much could be deferred. Borrowing for meeting the entire shortfall when the private sector is struggling to stand back on its feet could hurt them badly. If States go for option 1 and borrow ₹97,000 crore, it does not mean they will have to forego the remaining compensation. The remaining compensation will be paid to states after the above borrowing has been fully repaid. Therefore, “where is the doubt about the Centre not meeting its commitment,” asked the official.

Under the GST law, the compensation cess is a tax owned by the states and under Article 292 of the Constitution of India, the Centre can borrow on the security of its own taxes and resources which is Consolidated Fund of India. It cannot borrow in the security of the tax which it does not own, the official explained.

Source: thehindubusinessline.

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gst council
GST Council to meet on Aug 27 to discuss compensation payout to states

GST Council to meet on Aug 27 to discuss compensation payout to states

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The GST Council is likely to meet on August 27 to discuss the compensation payout to states and the opinion of the Attorney General on the legality of market borrowing to meet revenue shortfall.

Sources said the 41st meeting of the Goods and Services Tax (GST) Council would be a single agenda meeting on states’ compensation to be held via video conferencing.

Besides, a full-fledged meeting of the Council would be held on September 19, agenda for which is to be decided in due course, they added.

The Attorney General- who is the chief legal officer of the government – has opined that the Centre has no statutory obligation to make up for any shortfall in GST revenues of states from its coffers , sources had said.

They had earlier indicated that following the AG’s opinion, states may now have to look at market borrowings to meet the revenue shortfall and the GST Council will take a final call.

The Centre had in March sought views from Attorney General K K Venugopal on the legality of market borrowing by the GST Council to make up for any shortfall in compensation fund – a corpus created from levy of additional tax on luxury and sin goods to compensate states for revenue shortfall arising from their taxes being subsumed into GST.

The AG had also opined that the Council has to decide on meeting the shortfall in the GST compensation fund by providing the sufficient amount to be credited to the fund.

Sources said the options before the Council for meeting the shortfall could be to rationalize GST rates, cover more items under the compensation cess or increase the compensation cess, or recommend higher borrowing by states to be repaid by the future collection into the compensation fund.

Since raising tax or cess rates might not be feasible in the current pandemic situation, the option that remains is each state borrowing from market against the consolidated fund of the state.

Under the GST law, states were guaranteed to be compensated bi-monthly for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss.

The GST Council has to decide how to meet the shortfall in such circumstances and not the central government, sources added.

Any borrowing of the central government is upon the security of the Consolidated Fund of India. Similarly, borrowing by a state government is upon the security of the consolidated fund of the state.

In either case, it would lead to increased general government debt burden and also a higher fiscal deficit.

The payment of GST compensation to states became an issue after revenues from the imposition of cess started dwindling since August 2019 and the Centre had to dive into the excess cess amount collected during 2017-18 and 2018-19.

The Centre had released over ₹1.65 lakh crore in 2019-20 as GST compensation. However, the amount of cess collected during the year 2019-20 was ₹95,444 crore.

The compensation payout amount was ₹69,275 crore in 2018-19 and ₹41,146 crore in 2017-18.

Sourece: Live-Mint.

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GST collection
GST mop-up in July at Rs 87,422 crore, slips from June collections

GST mop-up in July at Rs 87,422 crore, slips from June collections

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The government collected goods and services tax (GST) of Rs 87,422 crore for July, lower than that collected in June, indicating a stability in collections, analysts said.

“During the previous month, a large number of taxpayers also paid taxes pertaining to February, March and April 2020 on account of the relief provided due to COVID-19,” the finance ministry said in a statement Saturday.

“Taxpayers with turnover less than Rs 5 core continue to enjoy relaxation in filing of returns till September 2020,” the ministry added.

The revenues for July 2020 are 86% of the GST revenues in the same month last year. During the month, the revenues from import of goods were 84% and the revenues from domestic transaction (including import of services) were 96% of the revenues from these sources during the same month last year.

“A collection approximate to 86% of last year does showcase quite a significant economic recovery from the pandemic though a bit of it could be on account of pent up demand. With economic activities increasing, the collections should hopefully witness aligning with estimates soon,” said Abhishek Jain, Tax Partner.

Of the total collections in July, Central Good & Services Tax CGST is Rs 16,147crore, State GST is Rs 21,418 crore, Integrated GST is Rs 42,592 crore (including Rs 20,324 crore collected on import of goods) and Cess is Rs 7,265 crore (including Rs 807 crore collected on import of goods).

Source: Economic-Times.

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gst-compensation
GST Compensation to States likely to get a Five-Year Extension

GST Compensation to States likely to get a Five-Year Extension

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Witnessing a sharp decline in the GST revenue due to the pandemic and the following lockdown and disruptions in economic activities across the country, the States are likely to request the Centre for an extension in the GST compensation period, by up to five years beyond FY22.

The GST Council is expected to meet this month to discuss alternative compensation mechanisms, amid inadequate cess collections. Reports said that the States may write to the 15th Finance Commission, seeking the extension. They are likely to point out the challenge in meeting routine expenditure after 2022, in the absence of any compensation.

Coming out of the first GST Council taking place against the backdrop of COVID-19 pandemic, Finance Minister Nirmala Sitharaman said that the Council decided to meet again in July with single-point agenda to discuss compensation cess.
“If there is a need for borrowings to meet compensation to states, who are going to borrow. How we are going to pay for it…,” she said about next meeting of the Council, hinting that fall in revenues has become a big cause of concern for the Centre to meet its liability towards the states as per GST legislation.

Under GST law, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the goods and services tax (GST) in July 2017. The compensation is the gap between the actual revenue collected and projected revenue. The projected revenue is revenue growth of 14 per cent for states per year over the base year 2015-16.

As per the GST Act, full compensation to the states has to be paid for a period of five years till FY22 only through the compensation fund that gets its funds through the levy of GST compensation cess on few items. However, with the fund not getting enough collections since August 2019, GST compensation to states have been delayed with Centre now looking at getting GST Council nod for a mechanism to finance the compensation.

After February, when the Centre released GST compensation of Rs 19,950 crore for the months of October and November 2019, it has cleared dues for December, January and February only now.

The monthly compensation requirement for states in 2020-21 is being pegged at Rs 20,250 crore, government sources said, leaving a big gap between what needs to be paid and what is being collected. Even in FY21, monthly cess collections could be a low of Rs 7,000-8,000 crore or lower.

Source: TaxScan.

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