MUMBAI: Maharashtra is set to end the Covid-impacted financial year with Goods and Services Tax (GST) collections lower by 11.6% in comparison to the previous year.
Data till March 25 shows that in 2019-20, the state collected Rs 1.85 lakh crore as GST, which fell to Rs 1.64 lakh crore in the current year—a Rs 21,594 crore shortfall.
The Goods and Services Tax is the main revenue earner for Maharashtra, whose collections are the highest in the country.
It includes Central-GST, State-GST, Integrated-GST and cess.
When the Maharashtra budget was tabled on March 8, the state had revised its target for SGST collections.
Although the target for 2020-21 had been set at Rs 1 lakh crore, the state had collected Rs 88,000 crore.
The gap was Rs 19,146 crore.
“The tax collections are not showing the expected buoyancy due to the Covid-19 pandemic and non-receipt of compensation cess from the central government,” the budget documents stated.
However, the data shows that while Goods and Services Tax collections were at their lowest during the peak of the lockdown owing to the lack of economic activity, they recovered once the restrictions were eased.
The main recovery came with the onset of the festive season in October 2020.
In March, in fact, Goods and Services Tax (GST) collections in the state were 7% higher than they were in 2019-20.
In March 2019-20, collections were Rs 14,712 crore compared to Rs 15,765 crore in March 2020-21.
Data shows that SGST collections were lowest in April and May during the peak of the lockdown—81.3% lower than in 2019 during the month of April and 47.6% lower in the month of May.
Collections revived with easing of the restrictions in June, but dipped once again in July and August.
The receipts revived in October and by December and SGST collections were 3% higher than they were during the same month last year.
A presentation by the state finance department to the Maharashtra cabinet in September 2020 had highlighted concerns about
GST collections.
“The contraction in GST collections reflects the weakness in Maharashtra’s economy,” it pointed out.
The presentation also predicted a contraction in the state’s economic growth with the GSDP growth expected to decline by 7.4% between October-December 2020 and slide further to -16.4% between January-March 2021.
The presentation also pointed out that unemployment and job losses would be major hindrances in the revival of the economy.
Source:timesofindia.indiatimes.com