Hyderabad: The Andhra Pradesh government may lose Rs 4,700 crore after the implementation of the GST next year. According to top sources in the AP government, the Central government is in favour of fixing GST rate at 18 per cent.
No final GST rate, however, has been announced yet as the GST Council, which is empowered to take a call on the tax rate, will take shape only after 50 per cent of legislative assemblies approve the Constitutional Amendment,
While 18 per cent is lower than what some states are demanding, people may have bear the brunt with prices of all services going up. Currently, the Centre gets 60 per cent of tax revenue from manufacture and 40 per cent from services. “The situation in AP is different and it will lose Rs 4,700 crore revenue,” a senior official in the commercial tax department said.
The official, however, said that the state’s tax revenue, which until now was only from Value Added Tax, will going forward include taxes levied on the service sector.
He said that the sharing of revenue from the service tax betw-een states and the Centre is not yet clear. “If the Centre can give even 50 per cent of the service tax collection, the loss can be compensated,” the official said.
