Centre urged to release pending GST payments to tide over financial crisis

The extension of lockdown will further worsen the state’s finances. The steep fall in GST collection in April is likely to continue in May as well. The GST collection this April was around Rs 400 crore when compared to Rs 1,951.66 crore in the corresponding period last year. Finance Minister Thomas Isaac has demanded that the Centre release the pending GST payments urgently. The government will mobilise Rs 1,000 crore through open market this week.

This will be utilised for the salary and pension payment which comes to around Rs 3,900 crore. On Saturday, Isaac told media persons that central assistance was imperative for the state to meet its regular expenses and fund Covid-19 control measures.

PM Narendra Modi meets Nirmala Sitharaman for 2nd economic stimulus package

The prime minister held discussions with Shah and Sitharaman and would have follow up meetings with ministers of key economic ministries such as Micro, Small & Medium Enterprises (MSME), sources said.

The finance ministry, which deferred release of monthly GST collection numbers on Friday, is also scheduled to make a detailed presentation to the prime minister later in the day on the state of economy and several initiatives that it plans to undertake to stimulate Indian economy.

The prime minister already had meetings with different ministries including civil aviation, labour and power on Friday. He had detailed deliberation with commerce and MSME ministries among others on Thursday with focus on attracting both domestic and overseas investment and revival of small businesses in the country so that the recovery process is hastened.

CBIC issued requirement for New LUT for the Financial Year 2019-2020

The CBIC vide Instruction No. 450/153/2017 – Cus IV dated April 30, 2020, which states that the exporters to submit a New LUT for the F.Y 19-20 while clearing export shipments. Therefore, vide Circular No. 137/07/2020-GST dated 13.04.2020, where the requirement under the GST Law for furnishing of any report, document, return, statement or such other record falls during between the period from 20.03.2020 to 29.06.2020, has been extended till 30.06.2020.

Therefore, in terms of Notification No. 35/2020-Central Tax, time limit for filing of LUT for the year 2020-21 shall stand extended to 30.06.2020 and the taxpayer can continue to make the supply without payment of tax under LUT provided that the FORM GST RFD-11 for the F.Y 2020-21 is furnished on or before 30.06.2020. Taxpayers may quote the reference no of the LUT for the year 2019-20 in the relevant documents. 

GST collections for April and May set to decline drastically

Goods and services tax (GST) collections are set to fall drastically in April and May with the number of electronic permits or e-way bills generated for transporting goods decreasing by close to 30% in March and by more than 80% in April sequentially, reflecting a general contraction in economic activities, according to official data. 

Businesses had generated only 6.7 million e-way bills from 1 to 27 April, against the 40.6 million generated in March, according to data available from GST Network (GSTN), the company that processes tax returns. The estimated more than 83% fall in e-way bills generated in April is set to have a telling effect on the GST revenue to be collected in May, which is slated to be reported on 1 June.