As we know the second wave of Covid-19 pandemic and possible lockdown-like restrictions in several parts of the state are likely to dent the government’s GST earnings in the new fiscal. After the general lockdown, the revenue growth was almost restored to ordinary in the last quarter of 2020-21. In this article, we will discuss on GST revenue likely to come down.
GST revenue likely to come down
The second wave of Covid-19 pandemic and possible lockdown-like restrictions in several parts of the state are likely to dent the government’s GST dividend in the new fiscal. After the general lockdown, the revenue growth was almost renovated to regular in the last quarter of 2020-21.
March witnessed an 18 pc expansion in GST, the second increased growth rate in the just-concluded fiscal. Only six months showed an optimistic growth in previous fiscal. Now we fear a similar situation as that during the start of previous fiscal. It may not be that bad but there would be a significant fall,” explained a senior officer in the taxes department.
The pandemic spread in communities where most of the business activities happen is another matter of concern, he said. Lockdown-like restrictions across the state will have an effect on trade and commerce. Unless the pandemic spread is brought under control, the circumstance will turn worse. In FY 21, GST revenue initial showed an year-over-year growth in September – 11.32 pc.
Further Notification by Central Government
The official further explained that ₹ 1.10 lakh crore would be borrowed through the special window as schemed and elevated mop-up would be utilised to compensate for the loss of revenue due to COVID-19.
The centre has already borrowed and releases to the states ₹ 1 lakh crore under the special window.
The official further explained that for next fiscal beginning April 1, the GST council will decide on the mechanism for compensating states in its upcoming meeting.
Also, the revenue loss next fiscal would be much less correlated to this fiscal. However, meeting the 14 % revenue growth would be difficult,” the official added.
In November however, there was an adverse growth of 3.64 pc. December noticed a jump to 20 pc. Also, In January, the collection dropped to 11.64 pc but was on the upward spiral in the attaining months, 13.25 pc in February and 18.66 pc in March. The previous fiscal’s cumulative collection stood at `17,620 crore, a nine percent fall from the revenue in 2019-20.