GST revenue slips below Rs 1 lakh Cr in June, hits 10-month low of Rs 92,849 Cr
GST collection slipped below Rs 1 lakh crore in June for the first time in eight months as the second wave of the Covid pandemic and the resultant lockdowns hit businesses and the economy.
At Rs 92,849 crore, the Goods and Services Tax (GST) collection is the lowest in 10 months since August 2020, when it was Rs 86,449 crore, official numbers released Tuesday showed.
The GST collections in June 2021 are primarily for supplies made in May — a month when most states were under different levels of lockdown, reducing business activity.
With significant relaxations in lockdown and business supplies picking up, the collections should see a definite uptick in the coming months, experts said.
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The gross GST revenue collected in the month of June 2021 is Rs 92,849 crore, of which Central GST is Rs 16,424 crore, State GST is Rs 20,397, Integrated GST is Rs 49,079 crore (including Rs 25,762 crore collected on import of goods) and Cess is Rs 6,949 crore (including Rs 809 crore collected on import of goods), the finance ministry said.
The mop-up in June 2021 is 2 percent higher than Rs 90,917 crore collected in June 2020.
GST collection had remained above the Rs 1 lakh crore mark for eight months in a row and was Rs 1.02 lakh crore in May. However, the collection in June 2021 dropped below Rs 1 lakh crore.
"The GST collection for June 2021 is related to the business transactions made during May 2021. During May 2021, most of the states/UTs were under either complete or partial lockdown due to COVID," the ministry added.
It said that e-way bill generation data for the month of June suggests that uptick in revenue is expected in the coming months.
The e-way bills generated during June 2021 has gone up to 5.5 crore, indicating recovery of trade and business, up from 3.99 crore in May. As many as 5.88 crore e-way bill were generated in April.
"With a reduction in caseload and easing of lockdowns, the e-way bills generated during June 2021 are 5.5 crore which indicates recovery of trade and business...it is expected that while the GST revenues have dipped during the month of June, the revenues will see an increase again from July 2021 onwards," the ministry added.
ICRA Chief Economist Aditi Nayar said despite declining to a 10-month low, the June 2021 GST collections provided a positive surprise.
"Overall, the GST collections in Q1 FY2022 are nearly twice as high as Q1 FY2021, highlighting the narrower impact of the state-wise restrictions necessitated by the second wave of COVID-19 in India, as compared to the stringent nationwide lockdown last year. This will buffer the revenue situation of the Centre and the states, which should support a ramping up of expenditure going ahead," Nayar added.
Deloitte India Senior Director M S Mani said while the collections are lower than Rs 1 lakh crore which had become the norm for the past few months, considering the fact that it relates to transactions in May 2021 which was badly impacted by the pandemic, it would be considered as a very satisfactory collection."
EY Tax Partner Abhishek Jain said the collections are for the supplies made in the month of May, where several parts of the country were under lockdown, so this dip is on the expected lines. With significant relaxations in lockdown and business supplies picking up, the collections should see a definite uptick in the coming months.