Telangana government fears drop in revenue post-GST

Hyderabad: The state government fears a drop in tax revenues once the GST comes into force. Deputy Chief Minister Kadiyam Srihari told the Legislative Assembly on Monday that the exact quantum of loss can be assessed only after the GST Council decides tax rates category-wise.

However, the government hopes to get good revenues with increased shares of service tax and Central excise under the GST regime. Replying to voting on Demands for Grants for 2017-18 on Commercial Taxes Administration, Mr Srihari said, “Telangana stood first in the country in terms of higher growth rate in commercial tax collections at 15.85 per cent. However, uncertainty prevails over tax collections once GST comes into force. The GST Council is yet to finalise which item will come under which slab.”

He said that while the Centre has assured the states that if growth rate is below 14 per cent, it would compensate them, but it was unlikely that TS will get anything since its current growth rate is above 14 per cent. “Clarity on all these issues is yet to come,” Mr Srihari said.

He said the government is earning Rs 2,151 crore through it share in Central taxes, 50 per cent share in VAT collections besides another Rs 700 crore through civil supplies department, which will cease to exist once GST comes into force.

However, he hoped that this would be compensated by increased share in service tax and central excise tax. Of the Rs 35,000 crore commercial tax collection at present, Rs 15,600 crore came from liquor and petroleum products alone, he said.