The Finance Ministry has confirmed that GST collections for the month of August have come in at Rs 86,449 crore, confirming a CNBC-TV18 report from earlier today. Of this, Rs 15,906 crore is CGST, Rs 21,064 crore is SGST, IGST of Rs 42,264 crore (including Rs 19,179 crore collected on import of goods) and a cess collection of Rs 7, 215 crore (including Rs673 crore collected on import of goods).

Share Market Live

NSE

However, on a month-on-month basis, August numbers reflect a slowdown in growth compared to last month, when GST collections were at Rs 87,422 crore. There is approximately a Rs 1,000 crore shortfall collections this month.

GST collections for August 2020 are 11.96 percent lower when compared to the year ago period. In August 2019, GST collections were at Rs 98,202 crore.

Although, experts are of a mixed opinion, Abhishek Jain, Tax Partner at EY said: "A significant part of the dip is attributable to imports, which have witnessed a decline due to the impact of the pandemic on international trade. Moreover, domestic collections having attained 92 percent YOY for operations in July, which is a sign of economic recovery post uplifment of lockdown."

MS Mani, Partner at Deloitte India added, "Coming in the backdrop of the disappointing GDP data for Q1 yesterday, these figures indicate that the collections are on the recovery path in first month of Q2. The fact that the GST collections on domestic transactions is just 8 percent lower than the same month last year would indicate a revival of economic activities. The sharp drop of 23 percent in the import GST could be on account of the various import substitution measures announced in recent times. It is expected that the collections trajectory in the coming months would enable it to reach the earlier year’s levels in a month or two."

Rajat Mohan, Senior Partner at AMRG & Associates said: "Tax collections for August are encouraging, indicating that economic activity is improving, however recent GDP numbers indicate contraction of economy to the extent of over 23 percent. Spurt in tax collection for central jurisdiction by 61 percent indicate that tax collections are a result of coercive action by tax officers."

Kapil Rana, Founder and Chairman of HostBooks Limited explained: "GST Collection for August 2020 falls short by 12% from the previous year same period figure, however there is 2% growth in respect to July 2020 same period previous year comparable figure. Looking at the revenue collection amidst this situations, it is evident India has successfully conquered over this pandemic effects. Revenue collection from Import of goods are 77% and domestic transactions 92% of the revenues from these sources collected during the same month last year. This demonstrates two things – domestic consumption is strongly overcoming the effect of pandemic secondly, people are showing more reliance on domestic products, which is pushing the domestic consumption hence the revenue collection."

However, the government believes that revenues for the month are 88 percent of the GST revenues in the same month last year. During the month, the revenues from import of goods were 77 percent and the revenues from domestic transaction (including import of services) were 92 percent of the revenues from these sources during the same month last year.

Government has also mentioned that the taxpayers with turnover less than Rs 5 crore continue to enjoy relaxation in filing of returns till September.

Implying that the government is expecting some uptick in the collections next month.

However, to watch out for is how soon the GST collections pick up and cross the yearly comparison revenues, as indirect taxes are considered to be the first indicators of economic activity and spending.

First Published:Sept 1, 2020 7:22 PM IST