New Delhi Goods and Services Tax (GST) revenue in May remained above the ₹1 lakh crore mark despite many parts of the country being hit by a devastating second wave of the Covid-19 pandemic, which led to lockdowns in key business centres including Maharashtra and Delhi from April .
The GST revenue in May — which reflects the actual business activities of the previous month — fell by over 27% to ₹1,02,709 crore compared to the record collections of ₹1,41,384 crore in April (reflecting actual business transactions of March 2021). The GST collections remained above the benchmark of ₹1 lakh crore for the eighth consecutive month.
“The revenues for the month of May 2021 are 65% higher than the GST revenues in the same month last year [ ₹62,151 crore],” the Union finance ministry said in a statement on Saturday. The Indian economy was hit hard in the first quarter of the previous year because of a 68-day national lockdown since March 25, 2020. The severity of the lockdowns since April this year was lower, with most states allowing manufacturing activities to continue.
The GST collection data for a month is normally released on the first day of the following month. As various deadlines were extended to provide relief to taxpayers from the second wave, they could file returns up to June 4, a finance ministry official said on condition of anonymity.
“The May figure actually reflects business activities from April 1 to April 30. In usual circumstances, business entities have to file returns [GSTR 3B] of these transactions by May 20. Due to the second wave, businesses had been granted more time to file returns,” the official explained. GSTR-3B is a monthly summary statement of business transactions filed by a registered entity.
Out of the ₹1,02,709 crore gross GST revenue collected in May this year, central GST (CGST) was ₹17,592 crore, state GST (SGST) was 22,653, integrated GST (IGST) was ₹53,199 crore, including ₹26,002 crore collected on the import of goods. The cess collection was ₹9,265 crore, including ₹868 crore collected on the import of goods, the finance ministry statement said.
“During the month, revenues from import of goods was 56% higher and the revenues from domestic transaction (including import of services) are 69% higher than the revenues from these sources during the same month last year,” it added.
Businesses performed poorly last year because of a hard nationwide lockdown for over two months that led to a 24.4% contraction of the economy in the first quarter of 2020-21. The economy shrank by 7.3% in the second quarter, before expanding by 0.5% in the three months ended December 31, 2020 and 1.6% in the March quarter. Overall, the Indian economy contracted by 7.3% in 2020-21, according to the GDP statistics released by the National Statistical Office on May 31.
MS Mani, senior director at consultancy firm Deloitte India, said: “Collections of 1 lakh crore pertaining to the transactions of April 21 could possibly indicate that the level of disruptions in the primary sales due to the lockdown was much lower than what was anticipated.”
Most analysts have said the same while revising their growth forecasts for the year only marginally. A Blomberg poll of 11 economists last week came up with a median growth estimate of 10% in the year, only marginally lower than the 10.5% the same economists projected before the second wave.
According to Abhishek Jain, tax partner at consultancy and audit firm EY, GST collections were good despite an aggressive second Covid-19 wave. “Also, the dip in comparison to the collections in the previous months was expected as these GST collections are for the supplies made in April, when part of the country was in lockdown. It’s noteworthy that the ₹1.02 lakh crores GST collections for the month of May will further be increased as businesses having less than ₹5 crore turnover have until 1 week of July to file returns,” he said.