The economy is starting to gather pace with the GST mop up in August reaching 88 per cent of the collection in August 2019, according to the Finance Ministry. At ₹86,500 crore, it was a tad lower than the ₹87,422 crore mopped up in July. Year-on-year, it was down 12 per cent on the impact of Covid and the consequent lockdowns,
A Ministry statement said the August revenue from domestic transactions (including import of services) was 92 per cent of the amount mopped up in August 2019, while it was 77 per cent from import of goods. The collection was low as taxpayers with a turnover of less than ₹5 crore continue to enjoy relaxation in filing of returns till September.
States seek clarity
Even as the GST collection numbers came in, States sought more clarity on the borrowing options offered by the Centre to meet the GST compensation shortfall, at a meeting State/UT Finance Secretaries had with Finance Secretary AB Pandey and Expenditure Secretary TV Somanathan.
According to sources, most queries related to the interest rate on the borrowing and the relaxation under the Fiscal Responsibility and Budget Management Act (FRBM). The two options were shared at the GST Council meeting on August 27 and the fineprint was sent to States/UTs on August 29.
Meanwhile, Delhi Chief Minister Arvind Kejriwal, followed his Tamil Nadu counterpart K Palaniswami, and sought the Prime Minister’s intervention in this matter.
In his letter, Kejriwal wrote “It is my humble submission that the Government of India may like to consider a much more simpler and legally sustainable option of borrowing by the Government of India to the full extent of the requirement of compensation in the year 2021 and 2022, to be serviced and repaid by the future collection of cess w.e.f. 2022.”