GST effect: Centre's fuel price cut costs Rs 30 crore for Telangana

Fuel and alcohol have together contributed Rs 7,803 crore through VAT post-GST in July and August.

Update: 2017-10-24 19:13 GMT
Responding to the Centre's appeal to reduce Value Added Tax (VAT) on petrol and diesel, Maharashtra government on Tuesday cut prices by Rs 2 for petrol and Re 1 for diesel respectively.

Hyderabad: Fuel and alcohol have come to the rescue of the state exchequer, which has suffered huge losses since the implementation of the Goods and Services Tax (GST) on July 1. 

Both fuel and alcohol have been exempted from the GST, which means that the state government gets to keep the revenue.

Official sources in the finance department said the state government earned Rs 2,126 crore per month through VAT, excluding fuel and alcohol, prior to GST.

However, after GST, the revenue slipped to Rs 1,413 crore in August. In September, it slightly improved to Rs 1,596 crore.

The government lost nearly Rs 1,000 crore in these two months. The commercial taxes department has set a collection target of Rs 36,000 crore this year.

The department could collect Rs 7,751 crore excluding fuel in the first three months from April to June prior to GST, with an average earning of Rs 2,500 crore per month.

However, post-GST, the government earned just Rs 2,729 crore in two months (July and August), amounting to almost 50 per cent reduction. Of this, SGST (state GST) was Rs 1,642 crore and CGST was Rs 1,087 crore.

Fuel and alcohol have together contributed Rs 7,803 crore through VAT post-GST in July and August.

However, with the Centre reducing the price of fuel by Rs 2 per litre recently, the state government fears revenue loss of Rs 30 crore per month as VAT is imposed on the overall fuel price.

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