GST collections indicate 1st rise after 6 months


NEW DELHI: Goods and services tax (GST) collections grew 4% to Rs 95,000 crore in September — the first rise after six months of decline — indicating a recovery in economic activity.
Exports rose 5.3% to $27.4 billion, initial estimates released by the government showed. This is the first increase in exports since February when the value of shipments from India rose 2.9%, indicating a pick-up in demand in Europe and the US.
While it is still lower than the pre-Covid monthly average of over Rs 1 lakh crore, the latest numbers show a recovery in collections from domestic sales and imports. “During the month (of September 2020), the revenues from import of goods were 102% and the revenues from domestic transaction (including import of services) were 105 % of the revenues from these sources during the same month last year,” an official statement said.

Collections in September are for sales and imports in August.
While the improvement in collections will help ease the burden on states, the bad news is that compensation cess on luxury and sin goods such as cars, soft drinks, tobacco and coal fell 6.5% to Rs 7,124 crore.
The GST Council is due to meet next week to discuss the vexed issue of compensating states for revenue loss as the Centre had promised to cover for all losses if annual collection growth was under 14%.
Finance secretary Ajay Bhushan Pandey said a record number of 5.7 crore e-way bills were issued in September. “This a very affirmative sign of economic recovery with increased business activities since the lockdown due to outbreak of Covid-19 pandemic six months back,” he said.
Despite the improvement, collections during April-September were still 25% lower.
“A modest increase of 4% in the GST collections compared to the previous year indicates that the economic recovery process is underway, with some key large states also reporting increased collections. If the present trend of GST collections continues, we should be hopeful of significant increase in the coming months based on the unlock steps taken in various states and the festival season ahead,” said Deloitte India senior director M S Mani.
Numbers from states showed that there was a healthy rise in collections in non-manufacturing states, with Nagaland leading the pack with a 43% jump in September and Jammu and Kashmir growing 30%. Among the so-called more industrialised states, Tamil Nadu and Haryana, saw collections improve 15% each.
Sikkim, Goa and several Northeast states also saw double-digit growth. Delhi was among the laggards, with collections dropping 7% in September.

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