Tamil Nadu’s Goods and Services Tax (GST) collections declined 24% to ₹4,635 crore in July this year, compared to ₹6,084 crore in July 2019, according to data released by the Union Finance Ministry on Saturday.
The decline was sharper in July than in the previous month. In June this year, the collections declined 15% to ₹4,976 crore from ₹5,881 crore in June last year.
As the State’s GST collections continue to fall with the lockdown affecting economic activity and consumption, a senior government official said businesses continued to struggle because of the pandemic, and they were granted an extension of time.
In June, a lot of taxpayers paid GST for February, March and April 2020, which got reflected in the June and July figures. Pointing out that compared to June, receipts from compensation and the Integrated Goods & Services Tax (IGST) had fallen, the official said, “We expect things to normalise in the coming months as consumption picks up.”
The State government has been demanding that the Centre compensate the States for the revenue shortfall in keeping with its commitment and look for alternative sources of funds for the compensation.
“One cannot lose sight of the fact that for the past four months, the country and the State have been battling COVID-19. So comparing these numbers does not make sense. We will have to accept the grim realities of lower revenue and higher deficits and take slow and steady steps towards recovery,” said K. Vaitheeswaran, a Chennai-based advocate and tax consultant.
