Punjab’s GST inflow in April-july 38% short of last year’s mop-up
The revenue had taken a nosedive of 86% at the start of the year as curfew was imposed in Punjab on March 23 to control the spread of the Covid-19
CHANDIGARH: The Punjab government has suffered a dent of 38% in its gross goods and services tax (GST) collection in the first four months of the current fiscal due to the Covid-19 outbreak and subsequent lockdown.
The state’s GST mop-up, including state GST (SGST) and integrated GST (IGST), for the April-july period was ₹2,644 crore as against ₹4,252 crore during the corresponding months of the previous year, according to the latest data shared by the taxation department.
The dip of ₹1,608 crore in GST collections as compared to financial year 2019 is primarily of account of revenue loss during April and May this year when the state was under total lockdown to check the spread of
coronavirus with curfew in place. Against a collection of ₹2,084 crore in the first two months of financial year 2019, the state government got merely ₹717 crore, or say 63% less, between April 1 and May 31 this year.
The revenue had taken a nosedive of 86% at the start of the year as curfew was imposed in Punjab on March 23, falling from ₹1,086 crore in April 2019 to merely ₹156 crore this time. May’s collections were better but marginally at ₹515 crore against last year’s ₹998 crore before picking up further in the subsequent two months.
27% JUMP IN REVENUE FROM JUNE
Unlike the all-india GST revenue which saw a 3.8% drop in July as compared to the previous month, the state posted an increase of 27%. The inflow rose to ₹1,103 crore from ₹870 crore in June, indicating stability in collections as economic activity is picking up in more and more sectors during the unlocking process, even though it is still 9.26% lower than the GST mop-up of ₹1,216 crore in the same month of the previous year.
A taxation official said the collections for these months could include some tax returns for previous months also as relief was provided to taxpayers in furnishing of returns for the months of February, March and April 2020 in view of the pandemic. Commissioner, taxation, Nilkanth S Avhad said there is some recovery due to revival of economy but there is still a long way to go.
DIP IN REVENUE WORRIES GOVT
The shortfall has got the state government worried even though its monthly GST revenue is protected at ₹2,503 crore for this year. Under the new indirect tax regime, the states have been guaranteed a 14% year-on-year growth in their GST revenue over the financial year 2015-16 base and they are to be compensated by the central government for any shortfall. “The centre is to give compensation to the state government for the GST revenue gap of Rs 4,335 crore in first two months (April and May 2020) which became due in June,” a state official said requesting anonymity.
The compensation, which is given bimonthly, for June and July is estimated to be approximately ₹3,000 crore as per advance tax collection figures and will become due this month. However, there is anxiety in the state government after the finance ministry indicated to a parliamentary panel that it may not be in a position to pay the promised compensation this year.
The state government, in a letter last week, raised its objections, reminding the centre of its innumerable assurances for assured compensation. Punjab has been among the states reporting the highest shortfall in the GST revenue collection in the past three years.