The goods and services tax (GST) collection for March slipped to a record low of Rs 28,309 crore as on April 29, sources told CNBC-TV18 on Thursday. This compares with Rs 1.13 lakh crore recorded in the same month last year. Government officials said that collection numbers present a worrying trend, given that normal business activities were underway till March 24, when a nationwide lockdown was announced to control the spread of coronavirus.
Economic activity though had slowed down in the initial days of the month as Covid-19 cases began to rise across the country, limiting manufacturing and imports. The numbers reflect a general contraction in economic activities as e-way bills generated for transporting goods decreasing by close to 30 per cent in March and by more than 80 per cent in April sequentially. E-way bills are required for transporting goods worth more than ₹50,000 within and across states.
The tax collection would put additional pressure on the government that is facing demands for fiscal stimulus in the wake of the coronavirus pandemic, raising concerns in the finance ministry over the amount that the Centre can hope to raise through taxes both direct and indirect. But officials said collections will likely improve as the last date to file returns for March has been extended till May 5.
But they cautioned that the indirect tax collection could worsen in May and June as economic activity could take a while to pick up pace after the lockdown is lifted. However, with business confined to essential goods and services, the amount of taxes coming during the first quarter is bound to be low, officials conceded.