GST AS A MAJOR SOURCE OF PUBLIC FINANCE AND IMPACT OF COVID - 19 ON GST COLLECTION: A STUDY OF PRE-POST LOCKDOWN

Abstract

In the first half of 2020, the whole world gripped in the hands of highly contagious COVID-19 Virus which pushed the governments across world to imposed unexpected and harsh measures such as lockdown to limit the spread of the coronavirus. As a result, all types of commercial activities hampered badly. Business across the world experienced huge fall in their revenues and profits, in some cases, wiped out completely. However, service sector came up with Work from Home solution but these measurements proved inefficient .These realities have led to a number of significant decline in Tax revenues to the government. Tax revenues and economic activities are positively correlated. Higher growth in economic activities implies positive revenue, on the other hand, lower growth dictates lower revenue growth. Consequently, tax revenues were adversely affected. The deterioration in tax reve-nues can be seen on both direct taxes impact has been significant on both direct taxes as well as indirect taxes, As soon as economic activities pick up the pace, tax collections are also expected to improve. In India, the COVID-19 outbreak and nationwide lockdown severely dented the revenue col-lections of states pushing them to look at possible revenue earning measures. At present, more than two-third of the economic activities are closed during the nation-wide lockdown. Services accounts for almost 60-70 per cent of GDP while manufacturing about 25 per cent. Both the activities have been seriously hit in the lockdown pushing analyst to project India GDP growth at just 1-2 per cent in FY 2021.