Wait...
  1. Home >
  2. Export Import News >
  3. Economy News >
  4. Coronavirus impact | India's indirect tax numbers set to go haywire

Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

Coronavirus impact | India's indirect tax numbers set to go haywire


Date: 07-04-2020
Subject: Coronavirus impact | India's indirect tax numbers set to go haywire
The COVID-19 outbreak is set to disrupt India's indirect tax mathematics.

The Goods and Services Tax collections for March slipped to Rs 97,597 crore against a collection of Rs 1.05 lakh crore in February.

India was going through a period of slowdown before the pandemic broke out. According to government data released in February, India's GDP grew 4.7 percent in the October-December quarter of 2019-20. GDP growth in the previous quarter had been revised to 5.1 percent.

India's GDP grew 4.5 percent in July-September 2019, the lowest since the fourth quarter of 2012-13. The economic slowdown came at the back of 5 percent GDP growth recorded in April-June and 7.1 percent in July-September last year.

RELATED NEWS
India drops anti-dumping probe against MEG imports from Saudi Arabia
Govt open to suggestions for better implementation of Vivad Se Vishwas scheme: CBDT chief
Coronavirus-induced lockdown: SMEs staring at a bleak future


"This year GST collection has been muted, even before COVID-19 and because of it, it will be even further muted," said MS Mani, Partner, Deloitte.

The outbreak of the pandemic led to the government declaring a 21-day lockdown, which resulted in huge disruption in supply chains and small businesses. GST collections for March saw an 8 percent decline over the same period year ago. Though the March figures capture transactions made in February, the impact of COVID-19 on transactions made in March would reflect in May numbers.

With regard to indirect tax, total amount budgeted as receipts for GST is Rs 6.63 lakh crore for the current fiscal. Total customs revenues were budgeted to bring in gross receipts of Rs 1.56 lakh crore while excise expected to garner Rs 3 lakh crore during 2019-20.

Track this blog for latest updates on coronavirus outbreak

"The moratorium given by government for payment of taxes and filing of returns is till June 3o. Mainly for shopkeepers and traders, who fall under the less than Rs 5 crore bracket. Which basically means that you can file your returns and pay the taxes after June 30. So there I am expecting that at least 80-85 percent of the guys below Rs 5 crore won't be paying the taxes as of now. So that's completely gone," said Rajat Bose, Partner, Shardul Amarchand Mangaldas.

The micro, small and medium enterprises (MSMEs) have been facing the   biggest brunt of COVID-19 outbreak. Businesses have been disrupted by production shutdown and supply chain disruption.


"Percentage of MSMEs are much larger than percentage of bigger companies. So even now, a good percentage of GST collections is from MSMEs. That will be a big hit in the next quarter," Bose said.

For the next financial year, there would be a conservative approach as far as consumption is concerned. Few industries, like automobiles, luxury items, tourism, aviation, hospitality, among others, would be worse hit.

"Unlike many other taxes, you know, this is a tax levied at the factory level, at the wholesaler and the retailer level. So the factory has been under lockdown. There is obviously no production and no sale so no collection.  Similarly, if at the retail level, it has been difficult for people to get their groceries, obviously the sale is not happening the way he used to happen before," Mani said.

Even if India's consumption demands pick up in the medium term, the way the virus is spreading in Europe and United States of America would also impact India's revenue from customs.

"I think from a customs standpoint, imports and exports would be hit. India maybe back in business, but because of the lockdown in US, so exports to these places and imports from there would be majorly hit, meaning customs duty revenue would also be affected," Bose said.

The announced a public  lockdown that would last for six months. Most of USA has social distancing and quarantine measures, with stay-at-home orders for more than a third of the population.

"Even though the domestic revenue may somewhat stabilize, but import and export transactions would be impacted for a longer period of time," Bose added.

Source:- moneycontrol.com

Infodrive India Pvt Ltd

Delhi :
  F-19, Pocket F, Okhla Phase-I
      Okhla Industrial Area

      New Delhi- 110020
   011 - 40703001

Kolkata :
  5th Floor Stesalit Towers,
      E-2-3, EP & GP Block,

      Sector-V, Salt Lake City,
      Kolkata-700 091
   033 - 71177191

INFODRIVE INDIA Copyright © 1996-2020 InfodriveIndia. All Rights Reserved.
Please read our Terms of Use and Privacy Policy before you use.

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Both
 Buyers
 Suppliers
 Both
OR
 Exim Help
+