Economy

Amid pandemic blues, festival cheer for economy

Our Bureau New Delhi | Updated on October 01, 2020 Published on October 01, 2020

September GST collections hit a six-month high

For the first time this fiscal year, the monthly GST collections have shown a growth on a year-on-year basis.

According to data released by the Finance Ministry, GST collection in September stood at ₹95,480 crore as against ₹91,916 crore during the corresponding month of the last fiscal, a growth of 4 per cent. On a sequential basis, the growth rate was 10.4 per cent over the ₹86,449-crore collected in August.

During September, revenues from import of goods were 102 per cent and that from domestic transactions (including import of services) 105 per cent of the revenues from these sources during the same month last year.

Experts feel the increase in collection reflectseconomic activity picking up.

 

Getting back to ‘normal’

Abhishek Jain, Tax Partner at EY, said that with a significant part of the economy resuming operations and international trade gathering pace, the collections have shown a decent growth. “The increased revenues indicate reinstatement of normalcy in business operations and provides an in general optimistic outlook,” he said.

All big States, barring Karnataka and Telangana, posted either good or flat growth. Maharashtra, which led the pack, managed to get ₹13,546 crore in September, which is almost equal to September 2019. Tamil Nadu posted a 15-per-cent year-on-year rise to ₹6,454 crore. Gujarat joined the ₹6,000-crore plus club with a growth of 6 per cent. Karnataka, too, managed to mop up over ₹6,000 crore, but its growth was 5 per cent lower than last September’s.

M S Mani, Senior Director at Deloitte India, said that modest 4 per cent year-on-year increase in the GST collections indicates that the economic recovery process is underway, with some key large States also reporting increased collections.

“If the present trends of GST collections continue, we should be hopeful of significant increases in the coming months based on the reopening steps taken in various States and the festival season ahead,” he said.

Pratik Jain, Partner at PwC India said that the better collections must come as a confidence booster for the Government. “With the festival season coming in, though muted, one would hope that collections would improve further. Measures such as E-invoicing should also help plug the tax leakage,” he said.

Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co, said this is an encouraging sign for the economy. The government will be relieved that the collections are higher over last year.

“It is expected that the revenue collection will continue to improve as we approach the festival season,” he said.

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Published on October 01, 2020
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