Estimated GST reduction is predicted to say deterioration after revenue growth
The projected decrease in Goods and Services Tax (GST) collections in 2020-21 and a couple of 2.35 lakh crore is predicted to say decline by about 15% in revenue, given the positive growth from September and is predicted to continue within the remaining five months of the fiscal year. Two finance ministry officials said.
September saw their positive growth (fiscal year) of 4% in total GST collections, after falling from 72% in March, posting a year-over-year increase of over 10% in October, once they posted 5 1.05 lakh crore crossed. The October numbers coincided with excellent news about the economy, including car sales and a robust purchasing manager’s index score, indicating a spurt in manufacturing activity.
In addition to positive GST collections since September, the amount of states that have fallen year-over-year in revenue has fallen from 15 in September to seven in September, officials added on condition of anonymity. “If this trend over subsequent five months will reduce the gap between projected revenue and actual revenue to ₹ 35,000 crore for the present fiscal year,” a politician said.
According to official figures, the 15 regions with declining revenue in September 2020 as compared to the previous year include Chandigarh (10% decline in GST revenue), Delhi (7%), Sikkim (49%), Arunachal Pradesh (20%), Manipur (19%), Mizoram (42%), Tripura (3%), Meghalaya (6%), Daman and Diu (83%), Karnataka (5%), Goa (23%), Lakshadweep (58) )%), Puducherry (1%), and Telangana (2%). And revenue growth in Uttar Pradesh and Maharashtra remained steady.
In October this year, only seven regions had year-over-year revenue collections, including Chandigarh (3%), Delhi (8%), Sikkim (5%), Daman and Diu (91%), Lakshadweep (55%). Huh. ), and Andaman and Nicobar Islands (42%).
“It is predicted that post-November collections are going to be even better, which can not only reduce the projected shortfall of ₹ 2.35 lakh crore [in 2020-21] but also will see better collections of compensation cess, hence, proportionally Reduce lending liabilities, ”said another officer.
At the time of introducing the new tax regime, the GST Act stated that a 14% increase in their annual tax income has been assured for the five years ending June 30, 2022, which the middle would levy cess levied on luxury goods. The medium is committed to meeting any shortfall in revenue. And sin products like alcohol, cigarettes, aerated water, automobiles, coal, and other tobacco items.
Due to the Covid-19 epidemic from 25 March and a 68-day lockdown thereafter, GST collection fell sharply in April, and contracting continued until August.
On 27 August, the middle gave the states the choice of tax (including arising out of) of ₹ 97,000 crore (shortfall arising from GST implementation issues) or the whole ₹ 2.35 lakh crore without paying principal or interest. . Kovid-19 epidemic) is estimated for this fiscal year. the quantity of ₹ 97,000 crore was later raised to ₹ 1.1 lakh crore on October 5. Seven states are still opposing the proposal of the middle and demanding full compensation of ₹ 2.35 lakh crore under the primary option.
Ms. Mani, a partner at consulting company Deloitte India, said: “With the expansion in GST collections for the last two months and powerful collections expected over subsequent few months, the gathering deficit is predicted to be lower – with reference to both GST and compensation In reference to cess. This might potentially reduce states’ lending schemes. The policy agenda could also be renewed by the GST Council in reducing revenue pressures. ”
Archit Gupta, founder, and CEO of the financial technology platform ClearTax said: “Looking at the general rate of growth of the last three months, it seems that the economy is on the way of recovery, and one can expect a month of moderate growth. One month within the next few months of the fiscal year