Telangana's share of tax falls by Rs 4 crore post GST

HYDERABAD: Telangana's hopes of getting higher tax devolution from the

Centre

have been dashed. Belying the estimates prepared by the state government, the Centre has credited only `1,174 crore for the month of July as the state's share in the overall tax devolution. This amount is `4 crore less than what Telangana used to get before the implementation of GST.

The TRS government is all the more unhappy as this went against the assurance given by the Centre. When chief minister

K Chandrasekhar Rao

had expressed apprehensions that the revenue to the state will drop after the introduction of GST, Union finance minister Arun Jaitley had assured him at one of the meetings that on the contrary , Telangana will stand to get an additional `300 crore every month, amounting to an additional income of at least `3,000 crore per year.

But the state has now realized that was not to be. “Instead of netting about `1,400 crore as was assured by the Centre, we got `4 crore less in July when compared to June,“ officials said. The drop in revenue is despite the fact that there has been a steep increase in the tax base and the number of tax payers due to the implementation of Goods and

Sales Tax

. In Telangana, 90% of the dealers with below `1.5 crore turnover have already paid their taxes and 50% of the firms with above `1.5 crore turnover have paid taxes directly to the Centre. The state had 2.05 lakh registered dealers under the erstwhile VAT regime and all of them, along with some new traders, have joined the GST network.

“The Centre has claimed that there has been a 20% hike in the tax base and the collections. By this yardstick, the state should get at least `300 crore more. But the reality is that the revenue has dropped,“ said a senior official in the government.

Based on the figures for July, the state government apprehends that there will be a further drop in the overall revenues as 50% of the products have already been moved to the central list and only a few are left with the state. The overall impact would be known better after the August and September devolutions are made, said sources in the finance department.