GST collections for April and May set to decline drastically

    Number of e-way bills generated for transporting goods fell by 30% in March and by over 80% in April sequentially

    NEW DELHI: Goods and services tax (GST) collections are set to fall drastically in April and May with the number of electronic permits or e-way bills generated for transporting goods decreasing by close to 30% in March and by more than 80% in April sequentially, reflecting a general contraction in economic activities, according to official data.

    E-way bills are required for transporting goods worth more than ₹50,000 within and across states. These enable officials to keep a tab on transactions without physically interfering with goods movement.

    Businesses had generated only 6.7 million e-way bills from 1 to 27 April, against the 40.6 million generated in March, according to data available from GST Network (GSTN), the company that processes tax returns.

    The estimated more than 83% fall in e-way bills generated in April is set to have a telling effect on the GST revenue to be collected in May, which is slated to be repo-rted on 1 June.

    Businesses have time till the 20th of a month to pay taxes for transactions in the previous month. As such, May revenue is set to reflect the full impact of the drop in economic activities because of the lockdown.

    Signs of the impact the lockdown had on March sales are also expected to be visible in the GST collections being made in April. This will get reported on 1 May.

    The 40 million e-way bills generated in March reflect a 28.9% drop from the over 57 million e-way bills generated in February. One major reason is that the World Health Organization declared covid-19 a pandemic on 11 March.

    In the April-March period of FY20, GST revenue collection grew by 3.8% to ₹12.2 trillion from the year-ago period.

    Source- Livemint.

The post GST collections for April and May set to decline drastically appeared first on GST Station.

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