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GST collection shortfall stands at Rs 2.35 lakh crore due to COVID-19 impact

Shortfall in collection of goods and services tax (GST) stands at Rs 2.35 lakh crore for fiscal 2021, the government said on Thursday

twitter-logoBusinessToday.In | August 27, 2020 | Updated 17:25 IST
GST collection shortfall stands at Rs 2.35 lakh crore due to COVID-19 impact
Finance Minister Nirmala Sitharaman

Shortfall in collection of goods and services tax (GST) stands at Rs 2.35 lakh crore for fiscal 2021, the government said on Thursday. The cess collected for GST compensation was Rs 95,444 crore and the government has paid Rs 1.65 lakh crore to states for fiscal 2020, including Rs 13,806 crore for March, Finance Minister Nirmala Sitharaman said after the 41st GST Council meeting. Adding, Sitharaman said that the coronavirus was "an act of God" and an unforeseen factor that affected GST collection.

Speaking on the occasion, Finance Secretary, Ajay Bhushan Pandey said that the revenue shortfall for states was not only because of GST but because of impact from COVID-19. He also said that the government sought Attorney General's view on payment of compensation given shortfall in compensation fund. As per our calculations, shortfall on account of implementation of GST is only at Rs 97,000 crore, Pandey added.

Finance Minister Nirmala Sitharaman chaired the GST Council meeting via video conferencing in New Delhi. The meeting was attended by Minister of State Finance Anurag Thakur, besides finance ministers of states and UTs and senior officers from Union government and states.

The Centre has been under pressure from the states on the issue of compensation for revenue shortfall amid the coronavirus pandemic. GST compensation to states became an issue after revenues from the imposition of cess started dwindling since August 2019. The Centre had to dive into the excess cess amount collected during 2017-18 and 2018-19. The compensation payout amount was Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18.

In the last meeting held on June 12, the GST Council decided to waive off fees for late filing returns between July 2017 to January this year in a bid to minimise the impact of COVID-19 crisis on micro, small and medium enterprises (MSMEs).

Also read: GST Council Meeting Live Updates: 'GST collection severely impacted due to COVID,' says FinMin

Also read: Once bitten twice shy, industry hopes FM will deliver the goods this time

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