Slowdown in 3 sectors, dip in imports hit GST collection

NEW DELHI: The slowdown in three sectors - automobiles, cement and iron & steel - along with falling imports have taken a toll on GST collections, even as the services sector has managed to hold firm.

Collections in September fell 2.7 per cent to a little under Rs 92,000 crore, the lowest since March 2018, and was way below the psychological comfort level of Rs 1 lakh crore.

The three key sectors saw lower collections of Rs 6,200 crore, while several sectors such as electronics, consumer goods and tobacco have seen a healthy rise in GST payouts, officials said. While goods contribute around 70 per cent of the GST revenue, services account for the rest, according to a report published by Times of India.

Auto sector, which has seen sales decline for 11 straight months, led the decline with Rs 3,500 crore, followed by cement (around Rs 1,500 crore) and steel (around (Rs 1,200 crore). Besides, collections from imports were down nearly 13 per cent, impacting overall collections. Both imports and exports have remained weak in recent months as domestic economic activity stays muted.

The government has dismissed suggestions that there are flaws with the GST architecture, which was resulting in low collections. “Collections have been below Rs 1 lakh crore during the last two months. If there was a problem with the design, how would you explain the rise in initial two years?” an official said.

In Pune, finance minister Nirmala Sitharaman also cited floods in many parts of the country, including Maharashtra, Karnataka, Himachal, and Uttarakhand for the lower mop-up.