State loses revenue of Rs 10,000 crore due to GST, says Etala (Telangana finance minister)

Source: The Times of India     Jan 21, 2018

The implementation of Goods and Services Tax (GST) has resulted in the reduction of revenue of Rs 10,000 crore for Telangana, finance minister Etala Rajender said on Saturday. He said as against an expected revenue of Rs 95,000 crore, Telangana till now has netted only Rs 85,000 crore. The state's growth rate, which was 21.9 per cent before GST, has come down to 14 per cent after the new tax system came into force in July 2017, he added.

Speaking at the general body meeting of the All India Association of Central Excise Officers here, the minister said because of the slowdown caused by GST some state governments are having trouble even paying monthly salaries to employees.

He added that repeated requests of Telangana about the payment of compensation has yielded meagre results. "While we have to get Rs 450 crore, the Centre has released only Rs 250 crore. GST has closed all doors for state governments to improve revenues and has even reduced the chance to raise taxes," said Rajender.

'Of 125 crore population, only 2% pays taxes'

Etela wondered how the Centre fixed the same rate of tax for both cigarettes and beedis when the latter provides livelihood to poor women in several states, including Telangana. He also found fault with the higher tax rate on the granite industry which, he said, provides employment to a large number of people.

He requested central excise officers to be vigilant about evasion of tax by some traders.

"We have population of over 125 crore but the tax-paying public are only 2 per cent. That 2 per cent also includes 90% of big business groups. The situation must change and revenue officials have to play a bigger role in improving revenues," the minister said.

The finance minister feels higher tax rates would not help in higher tax collections. He suggested practical taxation to bring every citizen into the tax net.