Telangana tries to lower' growth for GST fund

Telangana tries to beat norm linking growth, compensation.

Hyderabad: Telangana state has received Rs 157 crore compensation from the Centre for the revenue loss it suffered on account of implementation of Goods and Sales Tax in September and October.

While the TS has to get Rs 3,590 crore for these two months as per the Centre’s calculations, it received only Rs 3,433 crore, a deficit of Rs 157 crore, which the Centre has now reimbursed.

While a majority of the states got higher compensation, of over Rs 500 crore, only Telangana state, Gujarat and Maharashtra got less as their revenue growth is more as specified by the GST Act.

As per the Centre’s calculations, all the states put together should collect GST revenue of Rs 92,000 crore. But, only Rs 81,000 crore was realised, a deficit of Rs 9,000 crore.

Following persistent demand from state governments to reimburse the revenue loss at the earliest, the Centre calculated state-wise revenue deficit and it was found that TS was eligible for Rs 157 crore.

The Centre discussed the state-wise revenue-wise details in the meeting held with secretaries of commercial taxes department of all states on December 9.

TS secretary of commercial taxes Somesh Kumar, who attended the meeting, brought to the notice how revenue collection was affected since the implementation of GST.

He said the transition period from VAT to GST and delay in filing of GST returns by traders in September and October were the reasons for dip in revenues.

As per GST norms, the states with revenue growth rate of less than 14 per cent are eligible to claim compensation. TS has been witnessing a growth rate of around 20 per cent, and became ineligible to claim compensation.

The TS government argued that the revenue growth rate is just about 14 per cent as petroleum products, which are not part of GST, are excluded from the calculation and sought compensation. It stated that if petroleum products were also included, then the growth rate would cross 20 per cent.

With the Centre proposing to bring petroleum products under GST, a meeting with finance ministers of all states has been convened in New Delhi on December 14 to discuss on the issue.

TS wants the Centre to address revenue loss issues first before bringing petroleum products under the ambit of GST, which remains the major source of revenue for the state government.

Growth vs money

  • As per GST norms, states with revenue growth rate of less than 14% are eligible to claim compensation.
  • TS has been witnessing a growth rate of around 20%
  • TS government says its revenue growth rate is just about 14% without petroleum products
  • Growth rate will cross 20% only if petroleum products are included.
  • TS points out petroleum products are not in GST.
( Source : Deccan Chronicle. )
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