Hyderabad: Being a consumption-based state has helped Telangana reap a rich harvest from the Integrated Goods and Sales Tax (IGST). Much of this was attributed to local purchase of automobiles, which are not manufactured in the state.
States with less than 14 per cent revenue growth are eligible for compensation. TS has been witnessing over 20 per cent growth rate.
The state has experienced a revenue loss of nearly Rs 400 crore on account of GST in the first three months and the government was concerned over not getting compensation on the ground of higher revenue growth.
These losses were primarily on account of IGST being locked up with the Centre as it took time to determine the share of each state. The Centre recently released Rs 2,300 crore to TS towards IGST which almost wiped out TS revenue losses.
A finance official said, “The major share of IGST has come from automobile sector. TS has no automobile manufacturing units. The cars, two-wheelers and other commercial vehicles manufactured in other states are sold here and TS gets IGST as a consumption state.”
He said, “The tax compliance on inter-state trade was comparatively worse under VAT regime. Under GST, there is no scope for tax evasion. IGST collection would increase in the coming months and accordingly, the TS would get a greater share.”
The state got Rs 418 crore through IGST for July, Rs 669 crore for August and Rs 900 crore for September. Going by the increasing trend, the TS government is confident of earning Rs 12,000 crore through IGST in the current fiscal 2017-18.
The TS has set itself a target to earn Rs 46,500 crore through commercial taxes in the Budget 2017-18 and has realised Rs 15,075 crore till September.