This story is from August 2, 2020

AP, TN see max GST decline in 1st quarter

AP, TN see max GST decline in 1st quarter
Chennai: Among the southern states, Andhra Pradesh, Kerala and Tamil Nadu faced maximum decline in GST revenue in the first quarter of the current financial year, compared to the same period last year.
While Andhra Pradesh and Kerala faced 46% decline, Tamil Nadu’s fall was 45%, as per the data released by the Union finance ministry. Telangana (35%) reported the least fall among southern states.
Karnataka’s GST revenue dropped by 37% during the same period. Except Kerala, all are industrialised states. Gujarat, however, suffered the maximum, 48%, among the industrialised states.
“The GST revenue, which includes state GST (SGST) and inter-state GST (IGST) has declined due to lockdown in the first quarter, but the good news is that the GST revenue has started increasing from May onwards,” said a senior finance department official.
Like the first quarter last year, Karnataka clocked maximum GST revenue among southern states this year too. As against Tamil Nadu’s GST revenue of Rs 6,659 crore, Karnataka mopped up Rs 8,591 crore from April to June this year.
“Karnataka gets considerable amount of revenue from the IT sector, which was not hit badly as their employees were working from their residences. But in Tamil Nadu, all manufacturing companies and MSMEs were hit badly. Naturally, GST revenue from them took a beating,” said the official.
One should look at the economic performance in August to get a better understanding of the new normal for GST revenues, said Ernst and Young indirect tax leader Uday Pimprikar.

States are not hopeful of getting any compensation for loss in GST during the lockdown period from the Centre. “Centre’s revenue collections should be equally stressed. There is some merit in Centre and states reconsidering the present compensation contract from a sustainability perspective.
Both parties need to balance short term revenue considerations vis-a-vis achieving revenue stability for the period beyond the initial five years,” said Pimprikar.
The government is also expecting more GST returns to be filed in the coming days.
“There are assessors who have not filed returns for the past financial year as the lockdown started from March 25. The Centre has provided time for assessors to file their returns till this month end. The situation could improve in coming months,” said the official.
End of Article
FOLLOW US ON SOCIAL MEDIA