Andhra Pradesh Finance Minister Yanamala Ramakrishnudu, who is a part of the ongoing GST Council meeting on Thursday, has said that states are facing Rs 1.3 lakh crore revenue shortfall on account of the GST and the compensation from the Central government is not enough
Andhra Pradesh Finance Minister Yanamala Ramakrishnudu, who is a part of the ongoing GST Council meeting on Thursday, has said that states are facing Rs 1.3 lakh crore revenue shortfall on account of the GST and the compensation from the Central government is not enough. Speaking with BTVi, on the sidelines of the meeting, Yanamala Ramakrishnudu said, “Each state suggested certain things. We suggested that since our state is a bifurcated state, we need a lot of amount to be given by the government of India to equalise the development.”
The GST Council meeting is headed by Finance Minister Arun Jaitley and constitutes of his state counterparts. The 25th edition of the meeting comes against the backdrop of lower GST collections and higher than the Budgeted fiscal deficit. GST collections slipped for the second straight month to Rs 80,808 crore in November, down from over Rs 83,000 crore in the previous month. The collections fell after the Council cut rates on as many as 178 items.
According to Finance Ministry, Rs 10,348 crore was transferred from IGST to CGST account in November and Rs 14,488 crore was transferred from IGST to SGST account by way of settlement of funds on account of cross utilisation of IGST credit for payment of CGST and SGST, respectively or due to inter-state business to consumer transactions. Thus, a total amount of Rs 24,836 crore is being transferred from IGST to CGST/SGST account by way of settlement, the Finance Ministry said in a statement.
The GST Council, which last time met on December 16, approved mandatory compliance of the e-Way Bill for the inter-state movement from February 1 to curb tax evasion, the trial run for which started on Monday.
In the 23rd GST Council meeting in November, a massive rejig took place, in which tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were cut to provide relief to consumers and businesses amid the economic slowdown. The top tax rate is restricted to luxury and demerit goods.
As many as 178 items of daily use were shifted from the top tax bracket of 28% to 18%, while a uniform 5% tax was prescribed for all restaurants, both air-conditioned and non-AC. Launched on July 1, the GST subsumed more than 12 different taxes including VAT, Excise Duty.