GST collections for Sept may cross Rs 95,000 cr for first time in FY21

The goods and services tax (GST) collections for September are likely to cross Rs 95,000 crore for the first time this fiscal year. The numbers are scheduled to be released on Thursday.
 
A key source said the figure may be close to Rs 1 trillion. He said GST collections are the best barometer of economic recovery.
 
Figures for September would be mainly for transactions carried out in August. Core sector output contracted for the sixth consecutive month at 8.5 per cent in August, from 8 per cent in July, indicating that economic recovery has slowed on a sequential basis.
 
After the economy contracted a record 23.9 per cent in the first quarter, many economists have re-assessed their earlier projections. Most of them now pegged degrowth at double digits for the current fiscal year.
 
The highest GST collections reported in the current fiscal year so far were Rs 90,917 crore in June.  The lockdown-affected April and May saw meagre collections of Rs 32,172 crore and Rs 62,151 crore, respectively. The collections also fell below Rs 90,000 crore in July and August.
 
While the mop-up stood at Rs 87,422 crore in July, these further slipped to Rs 86,449 crore in August.
 
The GST revenues for August are 88 per cent of the GST collected in the same month last year.
 
The GST collection numbers for September will come a few days ahead of the crucial GST Council meeting on Monday.
 
The meeting will deliberate on the compensation mechanism for states.
 
August brought good news for compensation as the compensation cess collections rose for the first time in five months. They were up 6 per cent year-on-year.
 
The finance ministry has estimated that there will be a gap of Rs 2.35 trillion between the compensation cess collections and compensation requirement of states in the current fiscal year.