Sushil Modi to head GOM on GST revenue shortfall faced by states

NEW DELHI: Bihar Deputy Chief Minister Sushil Modi will head the seven-member committee to look into revenue shortfall being faced by the states after the GST roll-out, and suggest steps for augmenting collections, a GST Council notification said.

The GST Council, headed by Finance Minister Arun Jaitley and comprising state ministers, had on December 22, 2018, decided to set up a group of ministers (GOM) to analyse reasons for shortfall in revenue collections by the states since July 2017. Several states including Punjab, Himachal Pradesh, Chattisgarh, Uttarakhand, Jammu and Kashmir, Odisha, Goa, Bihar, Gujarat and Delhi are facing revenue shortfall following the implementation of goods and services tax (GST). These states are facing revenue shortfall in the range of 14-37 per cent in the Aprilnovember period. Among the union territories, Puducherry is facing maximum shortfall of 43 per cent.

As per terms of reference (TOR) of the GOM, the committee will undertake data analysis using econometric and statistical tools and suggest “suitable measures/policy intervention” for course correction for revenue augmentation, particularly for the states suffering high revenue shortfall.

The committee would also take into account trends of revenue collection before and after implementation of GST.

It would also look into structural patterns of major sectors of the economy impacting revenue collection, including the services sector. The GOM would identify reasons for deviation in revenue collection trends, compare it with original assumptions worked out at the time of design and implementation of GST.