GST mop-up slips below Rs 1 lakh cr-mark, March collection at Rs 97,597 crore

New Delhi: GST collections in March slipped below the psychological Rs 1 lakh crore-mark for the first time in four months to Rs 97,597 crore as COVID-19 lockdown that shut most businesses compounded tax collections in an already sluggish economy.

Goods and Services Tax (GST) mop-up in March recorded a 8.4 per cent decline over March 2019 collection of Rs 1.06 lakh crore. The collections were lower on account of dip in revenues from domestic transactions as well as imports.

In the last four months - November 2019-February 2020 - GST collection surpassed the Rs 1 lakhcrore-mark. In February, mop-up was Rs 1.05 lakh crore, January (Rs 1.10 lakh crore), December (Rs 1.03 lakh crore) and November (Rs 1.03 lakh crore).

The number of GST returns filed during March was 76.5 lakh, lower than 83 lakh filed in February - reflecting poor compliance.

"The gross GST revenue collected in the month of March, 2020 is Rs 97,597 crore of which CGST is Rs 19,183 crore, SGST is Rs 25,601 crore, IGST is Rs 44,508 crore (including Rs 18,056 crore collected on imports) and Cess is Rs 8,306 crore (including Rs 841 crore collected on imports)," a finance ministry statement said on Wednesday.

The government has settled Rs 19,718 crore to CGST and Rs 14,915 crore to SGST from IGST as regular settlement.

The total revenue earned by the central government and state governments after regular settlement in March, 2020 is Rs 41,901 crore for CGST and Rs 43,516 crore for the SGST, it added.

The ministry further said that GST revenues from domestic transactions has shown a negative growth of 4 per cent over March, 2019. Taking into account the GST collected from import of goods, the total revenue during March, 2020 has also decreased by 8 per cent over March, 2019. During this month, the GST on import of goods has shown a negative growth of (-) 23 per cent as compared to March, 2019, the ministry added.

For the full financial year 2019-20, the GST from domestic transaction has shown a growth rate of 8 per cent over the revenues in the preceding year. During 2019-20, GST from import on goods fell by 8 per cent as compared to the previous year. Overall, gross GST revenues grew at 4 per cent year-on-year.

In the Revised Estimates, the government had pegged Central GST (CGST) collection at Rs 5.14 lakh crore and compensation cess at Rs 98,327 crore for 2019-20. In 2018-19 fiscal, CGST mop up was Rs 4.57 lakh crore and compensation cess was Rs 95,080 crore.

Tax experts, however, raised concern that GST collection number is likely to decline further next month on account of disruption in economic activity due to COVID-19 outbreak.

PwC India Partner & Leader, Indirect Tax, Pratik Jain said while there could be some impact of slowdown that got triggered due to the onset of COVID-19 (though the impact of lockdown will be reflected in April 2020 numbers), there is around 7 per cent reduction in filing of GSTR 3B over last month.

"It seems that many businesses may not have been able to pay GST because of liquidity issues being faced after the lockdown. As second half of March has been significantly impacted due to COVID-19 outbreak, the collections in April 20 is likely to be substantially lower," he added.

EY Tax Partner Abhishek Jain said GST collections not witnessing a significant dip this month is encouraging specifically with the numbers expected to reduce in coming months, including collections, in April.

"With most businesses being non-operational for a considerable period in March and the relaxation of delayed payments being allowed, the collections in the coming quarter would see quite a fall," Jain added.

Deloitte India Partner M S Mani said the lower than budgeted GST collections could be on account of the overall sluggishness in the economy in the past few months.

"At this stage, it is necessary for businesses to conserve cash in order to enable resumption of operations once the lockdown ends, any deferral of the GST payment timelines by a few months would significantly assist them in this process," Mani added.