[V.Narayan]

GST for Dec'20 at Rs 1.15 lakh crores or Rs 1150 billion at all time high

GST collections for December 2020 were 11.6% higher than December 2019 and at Rs 1.15 lakh crores at an all time high. This is the 4th month in a row that GST collections have improved and the third month GST was above Rs 1.00 lakh crores which is roughly treated as the minimum mark for fiscal sanity.

Better compliance enforcement has played a significant role in this surge in collections. It also reflects the greater digitization of the SME sector in India.

With this success I only hope the Indirect tax Authorities will outgrow their style and attitude of endless litigation and unclear rules open to interpretation.

More than the Sensex, which is an indicator of expectations, it is GST collections that are a measure of economic health

[V.Narayan]

GST for January almost touches Rs 1.20 lakh-crores

https://economictimes.indiatimes.com...w/80616224.cms

We are finally hitting GST collections that equal the taxes GST replaced. Good sign. This was 8% higher than the collections of January 2020. The exact figure is Rs 119,847. Let's see what today's budget brings. <emoji with hands folded in prayer>

Right now it is unclear how much of this higher collection is real economic recovery and how much is due to a better collection methods & tracking.

[volkman10]

Auto Industry starts 2021 on a positive note.

Jan 2021 sales figures show demand still strong.




Link

[PGA]

https://economictimes.indiatimes.com...utm_content=23


Where are we now and where are we headed? It is a incredibly confounding, someone is saying 'green shoots', for some its rip roaring, on ground reality of a tier II or III towns is speaking something else, yet the Cars/FMCGs/tractor guys say growth is rural. I guess its the time to keep one's head on even keel and to say 'Que Sera Sera'.

[Swapnil4585]

Originally Posted by V.Narayan

[b]Right now it is unclear how much of this higher collection is real economic recovery and how much is due to a better collection methods & tracking.

Take this figure with a pinch of salt.

Neither this indicates a recovery, nor this indicates better tracking mechanism.

People paid self assessed taxes related to FY 2019-20 in these two months, belatedly, as they were finalizing their Income Tax Audit.

[V.Narayan]

Originally Posted by PGA

I guess its the time to keep one's head on even keel and to say 'Que Sera Sera'.

Yes signals are confusing + stock market is living on a different planet, the planet of FII liquidity + the Govt & friendly media is trying very hard to portray green shoots. After declining some where between 9% and 11% for 2020-21 any whisper will look like a greenshoot. Even Chaudhuri Charan Singh could not manage such a decline in 1979-80. The surge in sales is, in my opinion, pent up demand of 8 months finding a release.

Originally Posted by Swapnil4585

People paid self assessed taxes related to FY 2019-20 in these two months, belatedly, as they were finalizing their Income Tax Audit.

You nailed it. My head was struggling to connect this surge in GST collections to any real economic recovery. Thank you.

[DigitalOne]

Originally Posted by Swapnil4585

Take this figure with a pinch of salt.

People paid self assessed taxes related to FY 2019-20 in these two months, belatedly, as they were finalizing their Income Tax Audit.

Originally Posted by V.Narayan

You nailed it. My head was struggling to connect this surge in GST collections to any real economic recovery. Thank you.

GST collection surge is nothing to do with Income tax.

In past few months GST compliance requirements have become stricter.

A business can't sell or ship goods to another business customer if the customer is not GST compliant, i.e., they have not paid GST or filed their GST returns. Similarly, a business can't claim Input Tax credits on their purchases if the vendors are not compliant. Vendor invoices have to be filed with GSTN for purchasers to be able to claim Input Tax credit.

This brings a chain reaction of compliance. Example, a Maruti Suzuki can't sell to a non-compliant dealer, and will not purchase from a non-compliant vendor.

This is one of the reasons for the GST surge. Other is the 'green shoots', if any.

[Swapnil4585]

Originally Posted by DigitalOne

GST collection surge is nothing to do with Income tax.

In past few months GST compliance requirements have become stricter.

We may be going off topic here, but what you are terming as "strict" compliance is not the case actually. It is a very murky area. May be the details of this we can discuss in a GST specific thread.

The turnover one shows in his / her / its Income Tax Return, has to be in conformity with GST. Lot of people who may not have paid correct GST for FY 2019-20 while filing their GST returns, have paid it now while completing their IT audit, etc. Why people cannot pay correct taxes while filing GST returns itself is also due to a flawed design.

This, plus the festive season contributed to the surge. Sorry for going off topic.

[V.Narayan]

Originally Posted by Swapnil4585

The turnover one shows in his / her / its Income Tax Return, has to be in conformity with GST. Lot of people who may not have paid correct GST for FY 2019-20 while filing their GST returns, have paid it now while completing their IT audit, etc. Why people cannot pay correct taxes while filing GST returns itself is also due to a flawed design.

Thanks. Can you explain the part highlighted in bold. Just for my/our learning. Thanks.

[volkman10]

Economy on way to recovery, segments turn green in Feb - 21 dispatches.. well almost all!



Link

[Latheesh]

Skoda at 853, that is funny. Remember they had to stop Rapid base variants booking due very high demand.

[aaggoswami]

Came across the new of Mahindra Auto Division firing 300 executives :
https://www.businesstoday.in/sectors...2%20per%20cent.

Not sure if this is due to Covid 19 or Mahindra's own mistake. But job loss in current economic scenario is a nightmare.

[volkman10]

Volkswagen suspends production in Brazil over Covid.

Brazil is reeling from a new wave of infections and deaths that has pushed hospitals across the country close to the breaking point.

During the first wave of the pandemic last year, production at car companies operating in Brazil ground to a near-total halt, causing output to plummet 99 percent last April.

Link

[mvadg]

Came across this in the Business Standard Opinion column

Economy since 2009: Fact and Fiction?
While many contemporary economists seem to have lost interest in economic history altogether, those born before 1980 have turned most unbecomingly partisan
https://mybs.in/2ZcvvmK

What do our learned members on this forum have to say about the below statements? Do they make sense?

...
here’s that dry list of data I was talking about. It’s very revealing.

Gross domestic product (GDP) growth in the five-year period of 2014-19 stood at 7.5 per cent on average, compared with 6.7 per cent in the previous five years. Gross value added (GVA) manufacturing growth was 8.6 per cent versus 6.4 per cent over the same period. Inflation, another key metric that hits where it hurts stood at an average of 4.8 per cent in the 2014-19 period, compared with an astronomical 10.3 per cent in the 2009-14 period. And so on.

This is not to say that the economy now does not have various necessary nuts and bolts missing. It does. Far too many of them. There are far too many people still in agriculture, they are paying next to no tax, and the sector is accounting for an ever-decreasing proportion of GDP.

The services sector, in contrast, is being fed with barely a trickle of people with the required training. It may well be another opportunity missed. As for manufacturing it is beginning to show the kind of life it needs, but that ship has largely sailed anyway. We can’t catch up with China, which has a 35-year head-start.

That said, my point is that there is an urgent need to restore some perspective. It is all very fashionable to go on criticising the government on its economic performance. But this criticism is not always on the basis of facts and it flies in the face of data, something economists just cannot afford to do.

[V.Narayan]

Originally Posted by mvadg

Came across this in the Business Standard Opinion column


What do our learned members on this forum have to say about the below statements? Do they make sense?

Thank you for sharing. I am not a learned member nor am I a student of economics but like every self respecting barber or taxi driver or retired man I have my views....

Gross domestic product (GDP) growth in the five-year period of 2014-19 stood at 7.5 per cent on average, compared with 6.7 per cent in the previous five years.

Bullocks. Make that Bullocks. The two figures are not an apples to apples because the Govt changed the method of GDP calculation. To sound facetious that's like saying 2.2 lbs is more than 1.0 kgs!!!

GDP Growth rate, India
Source: World Bank

YEAR % Growth
2014-15 +7.41
2015-16 +7.99
2016-17 +8.25
2017-18 +7.04
2018-19 +6.12
2019-20 +4.18
2020-21 -10.29

Average 4.38%
In all fairness the average between March 15 and March 19 is 7.36% before the full impact of DeMo and tardy GST implementation got felt. If we have to make a comparison then we should at least include March'20 too which takes the average GDP growth under NDA to 5.05%.

Gross value added (GVA) manufacturing growth was 8.6 per cent versus 6.4 per cent over the same period.

I do not know the basis for his calculations. But it is generally known the manufacturing has been under stress since DeMo except for the last 4 months.

Inflation, another key metric that hits where it hurts stood at an average of 4.8 per cent in the 2014-19 period, compared with an astronomical 10.3 per cent in the 2009-14 period.

Between 2004-05 and 2013-14 inflation was 8.39% pa and during the period 2014-15 to 2019-20 inflation stood at an average of 4.36% pa. This is one area where the last 6 to 7 years are better than the 10 years that preceded this period.