THIRUVANANTHAPURAM: Kerala is set to face another sharp decline in tax revenue owing to the lockdown enforced to contain the second wave of Covid. The state’s tax revenue and the GST collection would plummet as it happened during April-May last year, according to taxmen.The state had witnessed a huge dip in GST revenue during the period last year because of the nationwide lockdown which began on March 24, 2020. The tax collection in April and May, 2020, were Rs 187.51 crore and Rs 697.45 crore as against the 2019 figures of Rs 1,699.25 crore and Rs 1,574.49 crore.
“This April’s GST collection would almost be similar to that of May last year. Businesses contributing a major chunk of the GST revenue were closed for most of the month. It isn’t clear whether the lockdown would be extended. Not just the GST, the state’s own tax revenue, like from the sale of petroleum, would be low. Revenue from liquor sales is zero except for the first week,” an officer said.
Major businesses contributing to the state’s GST revenue are those dealing with building materials, automobiles, electrical items and electronics. Shops and establishments in these sectors are not allowed normal functioning during the lockdown.
After the first lockdown, the GST revenue was almost restored to normal in the last quarter of 2020-21. March witnessed an 18% growth, the second highest monthly growth rate in that fiscal. The first six months in the previous fiscal had shown negative growth.
The state tax revenue is also expected to see a dip. Revenue from diesel sales would be severely affected as public transport was stopped and construction work was less.
After last year’s lockdown, petrol sales first recorded a year-over-year growth in November and diesel only in February this year. In financial year 21, the GST revenue first showed a year-over-year growth in September, at 11.32%. The previous fiscal’s total collection stood at Rs 17,620 crore, a nine percent fall from the revenue in 2019-20.