MUMBAI: The revival of GST collections since Diwali continued till the New Year with the December receipts in the state 7% higher than the same month in 2019. The state had received Rs 16,529.5 crore worth of GST in December 2019 and collected Rs 17,699 crore in the month in 2020. The receipts for the month were also the highest in 2020.
GST is the main revenue earner for the state government. Maharashtra’s GST collections are the highest in the country.
Since GST is a consumptionbased tax, it reflects the purchasing power in the economy. “The rise in GST receipts reflects economic recovery and the release of pent-up demand, which we also saw in June when the lockdown started opening. Also, festive sales since October pushed up collections,” said a senior official. The nationwide drive against evaders also pushed up GST receipts, officials say.
The state’s GST collections are still 16.7% lower in the ninemonth span between April and December than in 2019. The gap in collections is narrowing though. By the end of October, there was a 32% gap in GST collections between 2019 and 2020.
The gap between the state’s GST collection between April and December 2019 and 2020 was Rs 22,897 crore. In 2019, the state had collected Rs 1,37,095 crore between April and December. Last year, it has collected Rs 1,14,198 crore during the same period. GST includes SGST, CGST, IGST and cess.
Data shows that SGST collections in the state were lowest in April and May during the peak of the lockdown. The collections were 81.3% lower than in 2019 during the month of April and 47.6% lower in May. Collections revived with easing of the lockdown in June but dipped once again in July and August. The receipts revived in October and by December SGST collections are 3% higher than during the same month in 2019.
A presentation by the state finance department to the cabinet in September had highlighted concerns about GST collections. “The contraction in GST collections reflects the weakness in Maharashtra’s economy,” the presentation said. It predicted a contraction in the state’s economic growth with the GSDP growth expected to shrink 7.4% between October-December and slide further to -16.7% in January-March 2021. The presentation pointed out unemployment would be major hindrance.