The COVID-19 pandemic led to some tough times for the Indian economy. Several sectors struggled to keep up with the restrictions while the Indian GDP saw a drop of nearly 23 percent due to the pandemic. After six months of decline, in September, Goods and services tax (GST) collections grew 4% to Rs 95,000 crores. This hike, at last, indicates that the market is slowly returning to the pre-COVID levels.
According to estimated government data, exports have hiked by 5.3 percent to $27.4 billion. This marks the first increase in export after six months of depreciation. The last hike was recorded in February when the value of shipments from India was found to rise by 2.9% which showed an increase in demand in Europe and the United States of America.
Domestic sales and imports were also found to take a turn in a positive direction. Although the hike showed by the domestic market it is still not close to the pre COVID levels when the monthly average was seen to be around ₹ 1 lakh crore. The news media agency Times now reported comments of an official who said, “During the month (of September 2020), the revenues from import of goods were 102% and the revenues from the domestic transaction (including import of services) were 105 % of the revenues from these sources during the same month last year.”
The rise of the collection was also seen in sales and imports. While this would make things easier for the states, compensation cess on luxury and sin goods such as cars, soft drinks, tobacco, and coal fell 6.5% to ₹ 7,124 crore.
Another meeting of the GST collection board is set to be held next week where they would discuss the issue of compensating states for revenue loss as the Centre had promised to cover for all losses if annual collection growth was under 14%.
The record number that 5.7 crore e-way bills were issued in September was said by Finance secretary Ajay Bhushan Pandey. He also said, “This a very affirmative sign of economic recovery with increased business activities since the lockdown due to an outbreak of Covid-19 pandemic six months back.” Although these improvements are recorded, collections during April-September were still 25% lower.
Deloitte India senior director M S Mani’s comments were also reported by Times Now. He said, “A modest increase of 4% in the GST collections compared to the previous year indicates that the economic recovery process is underway, with some key large states also reporting increased collections. If the present trend of GST collections continues, we should be hopeful of a significant increase in the coming months based on the unlock steps taken in various states and the festival season ahead.”
The government record also points out that improvements were seen in collections in non-manufacturing states. The state with the most improvement was seen in Nagaland. Nagaland saw a rise of 53 percent. It is followed by Jammu and Kashmir who recorded a rise of 30 percent. Among the industrial states, Tamil Nadu and Haryana saw improvement in the collection by 15 percent each. Other states like Sikkim, Goa, and several Northeast states also saw double-digit improvement in the collection, whereas Delhi lagged behind with just 7 percent improvement in the collection.