How were the GST collections for the month of August 2020?

The GST numbers for August continued to be disappointing and that was largely along expected lines. GST collections for the month of August 2020 stood at Rs.86,449 crore. That is marginally lower than the July GST collections this year.

In June 2020, the GST collections had crossed the Rs.90,000 crore mark for the month but subsequently reverted lower in the months of July and August. The average shortfall each month in the last quarter is almost to the tune of Rs.20,000 crore pre month.

For the full fiscal year, 2020-21, the overall GST shortfall is expected to be closer to Rs.170,000 crore. This becomes a challenge considering that there could likely be a shortfall in income tax revenues and divestment inflows.\

The outcome could be that the fiscal gap could be much larger than originally anticipated. Against the budget estimate of 3.5%, it could be closer to 7.5%. This is likely to leave a huge gap in the budget unless the economy picks up very aggressively.