GST Inflows on a Short Term High

• The threat of an imminent lockdown and an increase in COVID-19 cases may have also prompted citizens to make advance purchases. Furthermore, based on audit recommendations, companies in the course of closing annual reports may have remitted higher GST, although a steady strengthening of the enforcement system, as well as proactive co-ordinated probes against taxpayers using bogus bills to evade liabilities, have all played a role. During the second wave of the pandemic, economic growth will not be as seriously affected.
• Moreover, in the midst of the annual report closure, businesses should have issued higher GST based on audit recommendations, as the regulatory scheme has constantly been strengthened and proactively co-ordinated samples against taxpayers using flawed bills to avoid debt have all played a part in this.

• In April 2021, gross goods and services tax receipts reached a peak of Rs. 1,41 lakh crore, showing that in the context of the current second wave of the pandemic of COVID-19 economic activity could yet not be as severely damaged as last year.

• The April GST collections exceeded 14 per cent in March 2021 from the previously highest collections in Rs. 1.24 lakh crore; since October, GS T sales have reached Rs. 1 lakh crore for the seventh consecutive months.

• As economic activity stopped in a national lockout in April of last year, indirect collections fell to Rs. 32,172 Crore. In April 2011, domestic transaction revenue (including imports of services) increased 21% in March 2021.

• Supply chain failures are not supposed to be as difficult as they have been in the past, based on limits placed in some states. Weakening demand, on the other hand, would force a rethinking of development and expenditure strategies, which has already started in some cases. Include the following indicators: In April, sales of major two-wheeler manufacturers fell by around a third compared to March. Plant closures have been steadily reducing inventory build-ups. Crisil cautioned in a study titled "Wall of Worry" that many measures have been falling since mid-April, including GST e-way bills, which have fallen by over 6% for two weeks in a row.

• According to IHS Markit, manufacturing order growth fell to an eight-month low in April. And, in response to the pandemic's spread and a critical lack of health-care facilities, business officials have proposed a strict lockdown. It will be naive to expect GST and other tax collections to remain stable until the government improves its control over diseases and vaccinations.

• The GST Council must be convened as soon as possible now that the Assembly elections are over. To add to what is currently on the table — the rationalisation of GST cost slabs, a rejig of prices on vital pandemic materials, and the thorny question of putting fuel under GST — the Council has to start planning ahead of time for any GST compensation shortfalls that might occur this year. India cannot tolerate a replay of the 2020 standoff between the Centre and the States, which threatened to destabilise the GST's founding spirit of cooperative federalism.