Hyderabad: Being a consumption-based state has helped Telangana reap a rich harvest from the Integrated Goods and Sales Tax (IGST), which is collected on inter-state trade. Much of this was attributed to local purchase of automobiles, which are not manufactured in the state.
The IGST goes to the Centre’s account directly and is released to the states later in proportion with their consumption of goods and services.
With GST being a consumption-based tax and Telangana state being more of a consumption state than a manufacturing state, the state is getting higher IGST.
The state got Rs 2,300 crore as IGST from July to September, which is almost equal to what it earned through GST at Rs 2,446 crore.
However, with higher GST returns, TS has become ineligible to claim compensation from the Centre for revenue loss suffered on account of the new tax. The Centre has paid just Rs 7 crore compensation to TS for July and August.
