Indicating economic slowdown, J&K’s December GST collection declines by 22%
Srinagar, Jan 4: Jammu and Kashmir’s GST collection in December fell by 22% to Rs 318 crore from Rs 409 crore the same month a year ago, indicating reduction in business activities and slowing economy in the UT.
The December Goods and Services Tax (GST) collection also witnessed a 12% decline than November receipts of Rs 360 crore. December is the third consecutive month showing the decline in the GST figures.
In contrary, the December tax collection at the all-India level witnessed an all-time high of Rs 1.15 lakh crore, a 12% hike on a year-on-year basis.
The biggest growth in the last 21 months and highest monthly revenue collection since the implementation of the ‘one nation, one tax’ in July 2017.
Jammu and Kashmir, along with Arunachal Pradesh, has been the worst performer with a 22% decline in December GST collection among the states and union territories with a legislature.
Belying the official claims that the business sentiment in J&K has started showing improvement, the decline in the GST collection reflects that state of economic activity is in dire straits.
The GST collection in the UT had also declined in November by 5% to Rs 360 crore, compared to Rs 377 crore in October same year.
Traditionally, the November and December months have an increased trade activity in the UT as residents start preparations for upcoming long winters. People store food items, buy winterwear and gadgets, and make other arrangements, particularly in Kashmir valley, as snow and rains often damage Srinagar-Jammu Highway frequently disconnecting Kashmir with rest of the world during the winters.
Despite, the tax collection for December and November declined after a marginal, though constant, increase in the previous three months, which government had claimed, an indication of business revival and growth in the Union Territory.
The GST collection for August, September and October has been Rs 326 crore, Rs 368 crore and Rs 377 crore respectively.
In November, J&K Government had said that after months of the economic slump due to COVID19 pandemic, the business in the UT had started showing improvement as indicated by the increase in GST collection.
“This has been made possible by the slew of measures taken by the government along with the economic relief package announced in the month of September 2020,” an official spokesperson had said, in a written statement.
“These steps (by the government) helped in boosting the business and the other ailing sectors that had suffered due to adverse impact of COVID-19 and had a positive impact on the growth of businesses in the Union Territory.”
Rs 1350-cr Economic Package
The UT government in September last year announced a Rs 1350-crore package. It included 5% interest subvention on all types of business loans, 50% subsidy on fixed electricity charges for one year and waiver on water charges for six months, besides some other measures.
The November and December GST figures validate what the traders’ bodies and businessmen here constantly say that Kashmir economy is going through worst of the times. COVID19 pandemic has only worsened the ‘bad situation’ which was going on since 2014 floods and in between faced 2016 turmoil and lockdown imposed post-August 5, 2019.
Kashmir Chamber of Commerce and Industries (KCCI) recently, while asking for full implementation of the economic package, said the business community is in stress.
While urging the government to extend VAT amnesty scheme for another year, KCCI said the situation emerging after August 2019 onwards has gone from bad to worse due to the COVID-19 pandemic and the economy is worst hit due to the stress.