Government Collects Rs 87,422 Crore As GST For June
The government’s Goods and Services Tax mop up for June, collected in July, stood at Rs 87,422 crore as the lifting of the world’s strictest lockdown helped in prompting a gradual pick-up in consumption.
Although the GST revenue for May was Rs 90,917 crore for May, the collections forr that month included tax payment for February to April as deadlines for tax payment were extended to provide relief to businesses hit by Covid-19 pandemic, the Ministry of Finance said in a statement.
While the collections for June are less than the collections for May, tax collected in May also included collections for March and April, said Rajat Bose, a partner Shardul Amarchand Mangaldas & Co.
Rajat Mohan, a partner at AMRG & Associates agreed that tax collected for May represented payments for multiple tax periods falling during the lockdown period. However, tax collected for June mostly accounts for that particular month’s tax period as there has been no extension for large taxpayers, he added.
The mop up for June was 14% lower than the GST collected in the same month last year. For June, businesses with turnover below Rs 5 crore can pay GST till Sept. 25. However, there was no extension in the deadline given to businesses with turnover above Rs 5 crore, that had to pay GST by July 20. The mop up for June includes tax payments of large businesses, along with some delayed tax payment for March-April as businesses with turnover below Rs 5 crore could pay GST by July 9.
The collections for March and April had nosedived as India improved the world’s biggest lockdown that brought the economy to a standstill. With the gradual lifting of the lockdown, GST collections are expected to pick up gradually.
With economic activity increasing, the collections should hopefully increase in the coming months, said Abhishek Jain, a partner at EY India. Rajat Bose called the tax mop up for June “encouraging and reminiscent of economic recovery.”
Breakup of GST collections for May
- Central GST: Rs 16,147 crore
- State GST: Rs 21,418 crore
- Integrated GST: Rs 42,592 crore
- Compensation cess: Rs 7,265 crore
Integrated GST is settled between states and the central government based on consumption in respective states. After the settlement, central and state GST stood at Rs 39,467 crore and Rs 40,256 crore, respectively.