Karnataka GST collections on upswing, points to revival in buying sentiment

BENGALURU: Karnataka’s Goods and Services Tax (GST) collection for October has surpassed that of the same month last year, in an indication of a pick-up in business and purchasing sentiment.

The state’s commercial taxes department has collected Rs 3,680 crore in state GST (SGST) this month against Rs 3,056 crore in October 2019.

The figures do not, however, include collections from sales tax on petrol and diesel, as well as professional taxes.

This month’s numbers reflect the GST collected by merchants from customers in September. A dealer has time till the 22
^nd of the following month to remit the GST collected to the government.

The data points to a clear jump in sales, both value and volume-wise.

Tax officials believe the run-up to the festival season has led to increased footfalls at shops and malls, and other businesses.

The tax authorities are also hoping that the SGST collections will be equally good in November in view of the robust business seen during Navaratri earlier in the month.

“The GST collections are coming back to last year’s levels,” a commercial taxes department official, who was not willing to be identified by name, said.

“Our commercial tax collections from April to October are about 85% of last year’s levels during this period,” the official added.

While the GST collection was 40% of last year’s level in April, it progressively increased, finally exceeding last year’s number in October.

Besides retail, auto and real estate sectors have done well, according to industry bodies.

Kishore Jain, president of industry body Confederation of Real Estate Developers’ Association of India – Bengaluru, said support from banks through soft interest rates and bargain deals have led to residential real estate transactions picking up since August.

“We have reached about 70% of pre-Covid-19 levels, and some developers are confident of reaching last year’s levels in about two months,” Jain said.

Bengaluru’s real estate market, he added, would have done better if the state government had followed in the footsteps of Maharashtra, which cut stamp duties to boost demand for residential apartments.

Car sales would have also been higher, but for supply disruptions, said MP Shyam, president of the Federation of Auto Dealers Association of Karnataka. Good monsoon rains, he said, have led to increased sale of tractors.

“Tractors and commercial equipment like excavators and backhoe loaders have sold 35% more than last year. There is clearly a month-on-month growth in all segments like passenger vehicles, LCVs and scooters,” he added.

The services and parts business were also back to normal, Shyam said, adding that banks’ moratorium on loan repayments has helped the economy in a big way.

Karnataka Bank chief executive MS Mahabaleshwara said the economy was certainly in revival mode as revealed by his own bank’s performance. The private sector lender registered 8% year-on-year growth in retail credit and 15% growth in credit to mid-corporates at the end of September, he said. The July-September quarter was also better in terms of both advances and recovery than April-June, he added.

(Source: Commercial Taxes Department, Karnataka)