As India braces itself for Stage 3 of coronavirus, a major impact can be seen on the GST collections in March and April even as taxpayers demand extension of date of filing of returns from March 20, 2020, to a later date. COVID-19 has pushed people into social distancing and with a virtual lockdown taking place and the travel, hotel and tourism sectors seem the worst affected.
Airlines and hospitality are witnessing a sharp fall in business. Trade, transport, communication and broadcasting were likely to generate Rs 33 lakh crore worth of services in the current financial year. These numbers will have to be revised soon eventually impacting GST collections from these segments.
The GST collection target of Rs 1.25 lakh crore for March 2020, looks dubious in the current scenario, where bulk revenue from transport, tourism and hotels are expected to take a further hit. This is likely to be extended to other sectors such as fuel minerals, electricity and water and rubber, plastic, and petroleum products. In February 2020, the GST collection was Rs 1.06 lakh crore against the department’s target of Rs 1.10 lakh crore.
The revised budget estimate and revenue from GST in the current financial year is likely to be Rs 6.12 lakh crore, as per the statistics released by the Central Government. Until January 2020, the collection had reached nearly Rs 5 lakh crore. Businesses would find it challenging to file returns by March 20, 2020, as most offices are working on low staffing or have asked their employees to work from home. There is a request from some quarters for extension of filing dates.
Ensuring that the virus doesn’t make a dent on the country’s economy and controlling it’s spread in the community is of utmost importance. These would be a herculean task for our government, as there are two battles to be fought on two different fronts at the same time.