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GST collection to be record Rs 1.20 lakh crore in January: SBI report

GST collection to be record Rs 1.20 lakh crore in January: SBI report

After clocking record collections in December, the Goods and Service Tax (GST) revenue is expected to cross Rs 1.20 lakh crore in January 2021, indicating that government’s ongoing efforts are bearing fruit.

GST collections will be in the range of Rs 1.21-1.23 lakh crore and may still have an upside, says Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

Monthly GST collections have been showing higher year-on-year numbers since September 2020, indicating revival in the economy. It touched a record high of Rs 1.15 lakh crore, which was the highest ever collections since the implementation of the countrywide tax in July 2017. The previously record high of Rs 1,13,866 crore was reported in the month of April 2019.

“The Government’s ongoing efforts are bearing fruit in the form of GST collections. After clocking record collections in December 2020 month (Rs 1.15 lakh crore), our internal simulation model indicates that January 2021 GST collections will be in the range of Rs 1.21-1.23 lakh crore and may still have an upside. The positive trend which started from September 2020 has sustained and gained momentum,” according to SBI research report ‘Ecowrap’.

Considering the highest ever January numbers, if 50 per cent of the Integrated GST (IGST) collection is disbursed to states by March 21, then state GST shortfall can narrow down to only a minimal Rs 11,000 crore after taking into account the full compensation cess, the report noted.

If the central government keeps 60 per cent of the IGST revenue, then the states could be staring at a shortfall of around Rs 67,000 crore, it added.
The SGST (state GST) collection for states was 12 per cent lower at Rs 1.87 lakh crore in April-December 2020, as compared to the same period previous year, while the allocated IGST was 13 per cent lower at Rs 1.26 lakh crore.

Meanwhile the cess collection stood at Rs 60,312 crore, which was 17 per cent lower than last year. The combined amount of SGST, allocated IGST and cess stands at Rs 3.73 lakh crore, which was 13 per cent lower than last year’s collection in the same period and it was equal to 58 per cent of the states’ budgeted SGST which stood at Rs 6.49 lakh crore.

As per the report, the government has already borrowed Rs 11.46 lakh crore (as on January 22, 2021) this fiscal and the remaining gross borrowing of Rs 1.6 lakh crore is expected as per the calendar, thereby taking the total gross borrowing to Rs 13.03 lakh crore, lower than Rs 13.10 lakh crore earlier.

Meanwhile, the government surplus cash balances have increased significantly recently. The number has increased to Rs 3.34 lakh crore as on January 28, 2021 compared to Rs 1.08 lakh crore in September 2020, which indicates that the government is collecting huge amount of tax revenues which it is not able to spend.

“This in turn means that the government will have to borrow less next year than our earlier anticipated gross borrowing of Rs 11.5 lakh crore. Thus, the market perception of upward pressure on bond yield due to increased borrowing next fiscal or even this fiscal is not correct,” it said.

The SBI report suggested that the surplus cash balances can well be used to finance a sizeable portion of fiscal deficit in FY22 to keep interest rate increase in check and fasten the pace of recovery further.

As per the report, the other option is to also use a portion of cash balances to spend and pay back all outstanding dues of FY21, like outstanding SME payments from government departments, pending GST bills which in itself will usher in a big fiscal push in FY22. “Clearly, we could be in for a goldilocks period. The question is can we go for the jugular?” it said.

Source: businesstoday

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GST collection in December at all-time high with over Rs 1.15 lakh crore revenue

GST collection in December at all-time high with over Rs 1.15 lakh crore revenue

The Goods and Services Tax (GST) collection in the month of December as the month saw the collection of over Rs 1.15 lakh crore, the finance ministry said on Friday.

December 2020 saw a record high of over Rs 1.15 lakh crore in the GST collection revenue. In fact, the revenues for the month of December 2020 are 12 per cent higher than the GST revenues in the same month in 2019. In November 2020, the GST collection had crossed Rs 1 lakh crore mark.

The highest jump in the GST collection was witnessed in Dadra and Nagar Haveli, with a growth of 68 per cent year on year, the collection during the month of December 2019 was Rs 154 crore and in 2020, it stood at Rs 259 crore.

Tripura saw the second-highest jump at 25 per cent year on year basis. The Central GST stands at Rs 21,365 crore and the state GST is at Rs 27,804 crore.

For the month of December, the integrated GST stood at Rs 57,426 crore (including Rs 27,050 crore collected on import of goods) and cess at Rs 8,579 crore (including Rs 971 crore collected on import of goods).

The total number of GSTR-3B returns filed for the month of November up till December 31, 2020, is 87 lakh.

The government has settled Rs 23,276 crore to CGST and Rs 17,681 crore to SGST from IGST as a regular settlement. The total revenue earned by the central government and the state governments after regular settlement in the month of December 2020 is Rs 44,641 crore for CGST and Rs 45,485 crore for SGST.

The GST revenues during December 2020 have crossed Rs 1.15 lakh crore for the first time. The highest GST collection till now was Rs 1,13,866 crore in the month of April 2019. The December 2020 revenues are significantly higher than last month’s revenues of Rs 1,04.963 crore.

This is the highest growth in monthly revenues in the past 21 months. This has been due to the combined effects of the rapid economic recovery and the nationwide drive against the GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance.

Source: India-Today. 


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CBIC extends deadline for filing GST Annual Returns

CBIC extends deadline for filing GST Annual Returns

The Central Board of Indirect Taxes and Customs ( CBIC ) has extended the filing of GST Annual Returns ( GSTR-9 ) for the Financial Year 2019-2020 till February 28th, 2021.

Earlier, the due date was December 31. There have been demands to extend the date for two reasons: first, the pandemic, and second, the due date for annual returns for FY19-20 is December 31.

GSTR-9 is an annual return to be filed yearly by taxpayers registered under GST. It consists of details regarding the outward and inward supplies made/received during the relevant previous year under different tax heads i.e. CGST, SGST & IGST and HSN codes. Basically, it is a consolidation of all the monthly/quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed in that year. Though complex, this return helps in extensive reconciliation of data for 100% transparent disclosures. The late fees for not filing the GSTR 9 within the due date is Rs 100 per day, per act. That means late fees of Rs 100 under CGST & Rs 100 under SGST will be applicable in case of delay. Thus, the total liability is Rs 200 per day of default. This is subject to a maximum of 0.25% of the taxpayer’s turnover in the relevant state or union territory. However, there is no late fee on IGST yet.

Source: TaxScan.

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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

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 crosses Rs 1 lakh crore mark for first time since February

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

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 Council may set up GoM on compensation shortfall

GST Council may set up GoM on compensation shortfall

The Goods and Services Tax (GST) Council could consider setting up a group of ministers (GoM) to resolve the row over states having to borrow from the market in order to meet the shortfall in compensation. Apart from the two options that the Centre has offered to the states, a third has emerged, which proposes that they make such borrowings jointly, rather than states taking on the entire burden. Punjab has written to the Centre, asking for a GoM to resolve the issue. Kerala and Chhattisgarh have backed the demand.

“Why not set up a GoM to decide?” said Kerala finance minister Thomas Isaac. The issue of borrowing in lieu of GST compensation can be resolved within the GoM, as in the past, he said, adding that the council can also discuss the option of the Centre offering something additional to states, such as agreeing to take on some part of the total borrowing.

The council is scheduled to meet next on October 12 to deliberate on the matter. The government has offered two options to the states to meet the GST compensation deficit – borrow Rs 1.1 lakh crore to partially meet shortfall or borrow the entire Rs 2.35 crore deficit. The GST Council meeting on October 5 could not decide on these options, with 10 states and UTs strongly opposing them. A top official from an opposition-ruled state also backed the third option, with both Centre and states sharing some burden of the borrowing. “This (borrowing) could be in proportion to the vote share of states and the Centre (in the council),” the official said.

Chhattisgarh commercial taxes minister TS Singh Deo asked why a GoM couldn’t be set up, rather than forcing states to choose. “These suggestions could be looked at,” he said. Deo also dismissed the view that the council is not mandated to vote on borrowing proposals. If the proposal has been put to the council by the Centre in lieu of compensation due to states, how can it not be decided by that forum, he asked. Some states such as Uttar Pradesh have suggested revenue augmentation measures, including raising cess on gutka, he said.

Source: Economic-Times.

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GST Council approves increased borrowing limit of Rs 1.1 lakh crore under option 1

GST Council approves increased borrowing limit of Rs 1.1 lakh crore under option 1

The GST Council has approved an increased borrowing limit of Rs 1.1 lakh crore instead of Rs 97,000 crore in the first borrowing option provided to the states.

The Centre had proposed an increased borrowing limit in the ongoing 42nd goods and services tax (GST) Council meeting headed by finance minister Nirmala Sitharaman, assuming a 7% growth rate instead of the earlier assumption of 10% over the previous financial year. States had said the increase should be based on the actual rate of 2-3% witnessed last year.

The decision is the second such after the Council unanimously to extend the GST compensation cess levy beyond 2022.

Sources aware of the development said that levy will continue till the time the principal and interest are paid off, and be reviewed and decided from time to time. The initial proposal was to extend the levy by two years till 2024.

The rift between BJP ruled and opposition led states may widen with the former set to seek faster disbursement of funds through the special borrowing window proposed by the Centre.

But opposition led states will dig in their heels, demanding that Centre borrows and provides to states, as opposed to states borrowing, since it is the statutory obligation of the government to make up for revenue loss to states.
At the GST Council meeting on August 27, the Centre proposed that the states could borrow Rs 97,000 crore, equivalent to the revenue loss due to the GST transition, or Rs 2.35 lakh crore, equivalent to the revenue loss due to the GST transition and Covid-19. In the first option, the principal and interest would be paid from the cess fund, while in the second option, the states would bear the interest.

About 20 states have opted for the first borrowing option, but others have rejected both, which may prompt voting on the matter. States may also seek for a dispute resolution mechanism.

GST Council has worked on consensus among all stakeholders since inception, with the exception of one meeting where voting took place in December last year on the issue of state level lotteries.

The GST Council will also take up procedural issues aimed at simplification besides rate rationalisation on non-alcohol based sanitizers.

Source: Times-of-India

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GST revenues cross ₹95,000 crores in September

GST revenues cross ₹95,000 crores in September

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 collection drops for second month in Aug to Rs 86,449 crore

GST collection drops for second month in Aug to Rs 86,449 crore

The GST collection declined for the second consecutive month in August to Rs 86,449 crore, the finance ministry said on Tuesday.

On year-on-year basis, the August collection was 12 per cent lower compared to Rs 98,202 crore mopped up in the same month last year.

Of the gross collection, Central Goods and Services Tax (CGST) stood at Rs 15,906 crore, State Goods and Services Tax (SGST) Rs 21,064 crore, Integrated Goods and Services Tax (IGST) Rs 42,264 crore (including Rs 19,179 crore collected on import of goods) and Cess Rs 7,215 crore (including Rs 673 crore collected on import of goods).

Tax experts said the revenue numbers indicate that domestic economic activity is picking up and the drop in the collection is mainly due to reduced imports.

In a statement, the finance ministry said the government has settled Rs 18,216 crore to Central GST and Rs 14,650 crore to State GST from Integrated GST as regular settlement.

“The total revenue earned by Central Government and the State Governments after regular settlement in the month of August, 2020 is Rs 34,122 crore for CGST and Rs 35,714 crore for the SGST,” it added.

The revenues for August are 88 per cent of the GST collected in the same month last year. During the month, the revenues from import of goods were 77 per cent and the revenues from domestic transaction (including import of services) were 92 per cent of the revenues from these sources during the same month last year, the ministry said.

It further said that taxpayers with turnover less than Rs 5 crore have been permitted to file GST returns till September.

The GST collections have faltered since the beginning of the current fiscal as COVID-19-induced lockdown hampered economic activity.

The revenue in April was Rs 32,172 crore, May (Rs 62,151 crore), June (Rs 90,917 crore) and July (Rs 87,422 crore).

Leader (Indirect Tax) Pratik Jain said the trend in the last couple of months show collections seem to have stabilised at around 10 per cent lower than corresponding month last year.

“As things are opening up gradually, the collection is likely to be progressively better in coming months,” Jain said.

India Partner M S Mani said the collections are on the recovery path and GST collections on domestic transactions just 8 per cent lower than the same month last year indicate revival of economic activities.

“The state-wise data of GST collections indicates that the revival process has resulted in marginal collection increases in some states like Rajasthan and UP, marginal reductions in states like Haryana and Gujarat with significant dips in Maharashtra, Karnataka and Tamil Nadu,” Mani said.

Tax Partner Abhishek Jain said a significant part of the dip is attributable to imports, which has witnessed a decline as a result of reduced international trade.

“Also, domestic collections having attained 92 per cent year-on-year for operations in July is a sign of economic recovery post upliftment of lockdown,” he added.

Chairman and Founder Kapil Rana said: “The GST collection data demonstrates two things – domestic consumption is strongly overcoming the effect of the pandemic, secondly, people are showing more reliance on domestic products, which is pushing the domestic consumption hence the revenue collection”.

Source: Times-Of-India.

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Central Government Released Rs 1.65 Lakh Crore As GST Compensation To States In FY20

Central Government Released Rs 1.65 Lakh Crore As GST Compensation To States In FY20

The central government’s payout to states as compensation towards goods and services tax for the year ended March more than doubled over the last year as a result of slowing economic activity.

The compensation to states was Rs 1,65,302 crore, the Ministry of Finance said in a statement, adding the GST compensation cess, collected by the Centre, stood at Rs 95,444 crore. In 2018-19, the GST cess collected and compensation released to states were Rs 95,081 crore and Rs 69,275 crore, respectively.

The virus outbreak and the world’s most stringent lockdown lasting over more than two months aggravated an already-slowing economy by obliterating consumption—which nearly contributes 60% to the economy. As a result, India’s economy is widely expected to witness its first contraction in nearly four decades.

The central government compensates states bi-monthly as they lost powers to levy taxes such as value added tax with the rollout of GST. The compensation is guaranteed for five years, and is calculated at a growth rate of 14% keeping 2015-16 as the base year. With declining GST collections last year following a demand-led slowdown, the government had stopped releasing compensation bi-monthly due to inadequate collections from GST compensation cess that’s levied on sin or demerit goods.

Since the cess collected was about Rs 70,000 crore less than the requirement to compensate states, the amount collected as excess in 2017-18 and 2018-19 of about Rs 47,271 crore was used for the same. Besides, Rs 33,412 crore—that was transferred to Consolidated Fund of India—as balance IGST in 2017-18, was also utilised to compensate states, the statement said.

The amount of compensation to be given to the states is going to increase substantially this year, Rajat Bose, a partner at Shardul Amarchand Mangaldas & Co., said. That, he said, would be on account of muted GST collections as the Covid-19 pandemic has impacted consumption.

The government may have to resort to market borrowing to fulfill its commitment towards compensating states for losses due to GST, Bose told BloombergQuint.

The government is exploring various options to adequately compensate states that involve raising money from the markets with a guarantee from the central government or by extending compensation levy beyond five years and continuing to compensate states with the collections.

No Compensation For Five States
Maharashtra received the highest compensation of Rs 19,233 crore in 2019-20 followed by Karnataka that got Rs 18,628 crore, the statement said. Meghalaya received the lowest compensation of Rs 157 crore. States such as Manipur, Mizoram, Sikkim, Nagaland and Arunachal Pradesh reported surplus collection and didn’t need compensation from the Centre.

Source: Bloomberg-Quint

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