Telangana's fears were right, state loses Rs 800-cr income on GST rollout

Mumbai: The Goods and Services Tax or GST regime might have boosted income of some states or for that matter some union territories, but the state of Telangana, it turns out, was among top losers due to rollout of the new indirect tax system.

The state which was carved out of a united Andhra Pradesh on June 2, 2014, is in a catchh-22 situation as it is yet to find out as to what went wrong. "The first month of GST implementation showed a dip of Rs 800 crore in the revenue," a report in The Times of India said.

While giving the break up of total GST revenue mop up, state tax authorities said Telangana received Rs 850 crore under state GST and Rs 690 crore from petroleum products. Currently, petroleum products are exempt form the purview of the new tax system.

Besides, the state got Rs 500 crore from the sale of liquor, and Rs 150 crore from other taxes, the report further said. The state collected Rs 518 crore under central GST and hopes it will garner Rs 1,000 crore under Integrated GST (IGST) head.

It may be noted that states are supposed to return income they receive under IGST and CGST to the central government, according to the revenue and power sharing formula under the GST.

TOI quoted a senior state official as saying: "The tax collected on products coming in from other states and consumed here will come under IGST. Though Telangana has a share in that, there is no clarity over the amount to be shared by each state."