May Mop-up: GST collection above Rs 1 lakh crore; revenues 65% higher than that in May last year

By: |
June 06, 2021 4:15 AM

For the second year in a row, the Centre will borrow under special, relatively low-cost mechanism in 2021-22 to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans, sans any consequent fiscal cost to states.

While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore — there was still a shortfall, Rs 60,000-Rs 70,000 crore by one estimate — the idea is to borrow some Rs 1.58 lakh crore in 2021-22.While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore — there was still a shortfall, Rs 60,000-Rs 70,000 crore by one estimate — the idea is to borrow some Rs 1.58 lakh crore in 2021-22.

Gross Goods and Services Tax (GST) receipts came in at Rs 1,02,709 crore in May, markedly lower than the record Rs 1,41,384 crore mopped up in the previous month, yet a decent sum given the second Covid wave. May collections mostly pertained to the transactions conducted in April, so it reflected the lockdown’s impact only marginally; the collections could be much lower in June (May transactions).

The government said GST collections reported for May included the returns filed till June 4, as taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed returns filing for 15 days in the wake of the second Covid wave. The actual revenues for May would be higher since all the extended dates were yet to expire, it added.

In recent months, the government’s GST revenue has been robust — it has crossed the Rs 1 lakh crore mark for the eight straight month in May, thanks to steps taken to curb evasion and also a shift of business away from the informal sector, in addition to a nascent economic recovery that appears to have been quickly disrupted by the pandemic’s second surge.

For the second year in a row, the Centre will borrow under special, relatively low-cost mechanism in 2021-22 to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans, sans any consequent fiscal cost to states.

While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore — there was still a shortfall, Rs 60,000-Rs 70,000 crore by one estimate — the idea is to borrow some Rs 1.58 lakh crore in 2021-22.

The revenues of May 2021 were 65% higher than that in the same month last year, which belonged to transactions in April 2020, which witnessed a complete nationwide lockdown.

Of the May mop-up, Central GST were Rs 17,592 crore, state GST Rs 22,653 crire and I-GST Rs 53,199 crore (including Rs 26,002 crore collected on import of goods) and cess proceeds of Rs 9,265 crore (including Rs 868 crore collected on import of goods). “During the month, revenues from import of goods was 56% higher and the revenues from domestic transaction (including import of services) are 69% higher than the revenues from these sources during the same month last year,” the finance ministry said.

“This (May mop-up) is despite the fact that most of the states have been under strict lockdown due to the pandemic. In addition, while the taxpayers with turnover above Rs 5 crore had to file their returns by June 4, which they would have otherwise filed by May 20, smaller taxpayers with turnover less than Rs 5 crore still have time till first week of July to file the returns without any late fee and interest and the revenue from these taxpayers is deferred till then,” the ministry added.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Assam govt rolls out microfinance loan waiver scheme for 24 lakh women
2Rising fuel prices- Small is big: How the ‘Chhotu’ LPG cylinder became a bestseller
3WTO defers ministers’ meet