The pandemic-induced lockdown hit all the 66 sectors classified under goods and 27 sectors under services
As COVID-19 continues its seemingly unstoppable march across the globe, Kerala economy has taken a massive knock on the face as GST collection slid 37.4% overall with the goods segment accounting for a fall of 37.5% and the services segment accounting for a fall of 36.8% between March and August 2020 when compared to the same period last year.
The overall GST collection fell from ₹10,079 crore during March-August 2019 to ₹6,307 crore 2020, said a study under the Gulati Institute of Finance and Taxation by Anand Singh, State GST commissioner and associate professor N. Ramalingam.
Kerala was already reeling under two years of devastating floods in 2018 and 2019 and, prior to that, the 2016 November demonetisation and now the lockdown imposed on all spheres of activity to contain COVID-19. GST growth in the State was a nominal 0.17% between 2018-19 and 2019-20.
The pandemic-induced lockdown hit all the 66 sectors classified under goods and 27 sectors under services. Goods account for 82% of the GST and services 18%, the study said.
Fifty per cent of the GST under the goods head comes from building materials, automobiles and electrical and electronics goods while tax from the services sector is dominated by finance, construction and telecom.
The GST fall in the goods segment is from ₹8,157.7 crore to ₹5,094.2 crore while under the services segment the fall is from ₹1,922 crore to ₹1,213 crore.
All segments saw the slide with building material seeing a GST revenue fall of nearly 37%; automobiles more than 51%; electrical and electronic goods nearly 31%; medicines and medical products nearly 18%; lottery, which is classified under the goods head, more that 41%; provisions and grocery items 17%; jewellery more than 40% and textiles nearly 70%. GST from petroleum products fell 35% and FMCGs fell more than 18% and footwear more than 66%.
Under the services segment, GST from construction fell sharply at more than 44% while support services segment account for a fall of nearly 59%.
Entertainment and sports industry
The lockdown which forced people indoors was more prominently reflected on the entertainment and sports industry, where GST fell nearly 84%. Goods and passenger transport, accommodation and food, telecom and data services also showed varying levels of GST fall.
The study also said that the overall expected GST collection for the period under consideration was ₹7,456 crore, a fall of 26%, when considering the completion of all GST filings for the months.
Under the goods segment the deficit could then fall to 26.1% (actual collection ₹6,021.4 crore) and in the services segment it would fall to 25.3% (actual collection ₹1,434 crore).