In what could raise serious concerns for New Delhi, the revenue outlook continues to remain dismal and subdued, as the Goods and Services Tax collection numbers are still bleak. According to senior government sources, the GST collections for business activity in May recorded till today at 9:00 am reached only Rs 43,913 crore.

Share Market Live

NSE

“The numbers are worrisome as GST Collections are still not picking up despite the fact that business activities started resuming in May,” a senior government source told CNBC-TV18.

On a month on month basis, the GST collection for business activities in April, which were severely hit by lockdown stood at Rs 49,500 crore (approx) till June 5, sources had indicated to CNBC-TV18 earlier.

The government has not been releasing the GST collections data from April onwards since the April figures account for business activities undertaken in March and the COVID-19 lockdown started then and brought economic activities to a standstill.

On a yearly basis, the GST Collections for business activities in May 2019, reported in June 2019 were Rs 99,939 crore. GST collections for businesses in April 2019, recorded in May 2019 were at Rs 1,00,289 crore.

These are however just the provisional numbers and are subject to an upward revision as the last date to file for large taxpayers (above Rs 5 crore annual turnover) is June 27 and for small taxpayers (below Rs 5 crore annual turnover) is staggered through July-September.

Experts too feel that the collections will take some more time to improve and come back to the pre-COVID levels.

Pratik Jain, national leader, indirect taxes at PWC says, “Given that lockdown was eased in May, the subdued collections perhaps indicate that business is taking more time than expected to pick up. This might mean that possibility of any rate reduction or GST exemption for the industry is really remote now. In this uncertain environment, for the Central Government to compensate the States with a 14 percent annual increment would increasingly become a challenge. There would need to be a renegotiation between Centre and States on this, possibly with increasing the period of compensation beyond 5 years as agreed earlier. That said, one would expect the July collections (for June) to be better as business sentiments improve.”

Abhishek Jain, Tax Partner, EY analysed, "With another two days for payment of taxes for May, this number should witness an increase. The final collections for May could be a significant factor for analysing the way forward strategy for the Government on possible rate reduction, compensating states, etc as this would somewhere reflect the post lockdown collections/ expected revenue."

First Published:Jun 25, 2020 8:10 PM IST