The nationwide lockdown imposed to contain the spread of COVID-19 has led to a drop in the GST collections and impact the consumer spending across the country. But, in contrast, the GST revenue improved in the State in July bringing cheer to officials. Strikingly, the consumer spending also went up, which is against the trend across the country, more particularly the States which witnessed rise in COVID-19 cases.
According to information, a growth of 2.65% in the GST revenue (with compensation received) was registered during the month of July compared to corresponding period last fiscal. Similarly, a growth of 1.90% was witnessed in petroleum products during July.
There was a dip in the GST revenues by 14.36% across the country in July. There was a dip in the GST revenues during the first quarter (April-June) of this financial year in the State, for various reasons, 'primarily due to the lockdown.'
Dip in first quarter
Interestingly, there was a dip in the GST revenues during the first quarter in last fiscal (2019-20) too. The previous financial year started on a positive note as the GST collections touched ₹2,113.54 crore. But, in the subsequent months, there was a dip. The State government, apparently, could not sustain the momentum during the first quarter then. The revenue was considerably good during April 2019. However, during May and June, the target could not be achieved. While ₹1,892 crore was set as target for every month, the collections did not cross ₹1,650 crore each in May and June. A fall in automobile sales, crude oil prices, the slowdown in the construction industry, steel, etc. were some of the reasons cited. The steel prices witnessed a fall by 10 to 15%, while that of cement decline by about ₹20 per bag last year. But, some of these sectors have come to the rescue this financial year. The automobile, electronics and food items consumption increased thus leading to growth in the GST revenues. There is an improvement in petrol and diesel sales, sources say.
When contacted, Commercial Taxes Chief Commissioner Peeyush Kumar says that there was a loss of 75% revenue during lockdown. The loss, however, could be brought down to 25% from April-July. The department could achieve 80.46% of the target for GST revenues set for July, 2020. Similarly, 83.69% target set for petroleum Products was achieved. The GST collections witnessed a substantial dip because of the current pandemic in the first quarter. The increasing trend in July inclines to a recovery being in line, he says.