State gets ₹ 1,911 cr GST compensation for Jul-Oct
The Rajasthan government has sought ₹2,276 crore goods and services tax (GST) compensation for the July-December 2017 period from the Centre out of which it has received ₹1,911 crore for the July-October period, data tabled in the assembly revealed.
The data was made available on the assembly portal following a question raised by Bharatiya Janata Party (BJP) legislator Ghanshyam Tiwari.
Under the GST agreement – the unified tax came into effect from July 1 2017–the Centre guaranteed states that their tax revenues would grow at 14% per year.
States that fall short of the revenue target are eligible for compensation for five years after the implementation of the GST.
A look at the drop in revenue due to the implementation of the GST in Rajasthan reveals that the value added tax (VAT) revenue collections (subsumed under GST) fell from ₹ 934.61 crore in July 2017 to ₹ 51.97 crore in October 2017.
The state’s share from central sales tax fell from ₹63.17 crore in July to ₹14.94 crore in October.
A look at net loss on month to month basis reveals that the net revenue from items subsuming under the GST, fell from ₹1189.57 crore in July to ₹125.88 crore in August. The state received a compensation of more than ₹1,911 crore and stood fourth in terms of compensation received from the Centre for the July-October period behind Karnataka at ₹3,271 crore, followed by Gujarat at ₹2,282 crore and Punjab at ₹2,098 crore.
Under the GST law, a cess is levied on top of 28% tax on luxury cars, demerit and sin goods like tobacco to collect revenue to compensate states for any revenue loss on account of the GST implementation. The GST amalgamates more than a dozen taxes, including the service tax, excise and VAT.
The total revenue loss to states on account of the GST implementation was ₹24,500 crore between July and October and the Centre has already released the compensation to make up for it.
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