Budgets recently announced by different states indicate apprehensions over huge shortfall in GST collections this year. Many states have sharply revised their GST revenue targets for 2019-20.

The Kerala budget has revised its 2019-20 GST collection target (it includes state GST, share in the Central GST and transfer from Integrated GST) downward by 22 per cent to Rs 29,300 crore. It had earlier budgeted for a collection of Rs 37,600 crore.

Uttar Pradesh, the largest state in terms of population and second largest in term of Gross State Domestic Product (GSDP), has revised its 2019-20 GST collection from earlier Rs 1.10 lakh crore to Rs 94,550 crore, a shortfall of 14 per cent.

Rajasthan had budgeted for a GST collection of Rs 41,108 crore in 2019-20, but now it has revised the same downward by 13 per cent to Rs 35,800 crore. Orissa has revised its GST collection target for the year from Rs 25,600 crore to Rs 22,900 crore, a drop of 10 per cent. West Bengal has also revised its GST collection (SGST and CGST) by 7 per cent to Rs 46,500 from Rs 49,950 crore.

State finance ministers have been complainin about shortfall in GST collections for some time now and how it is creating problems for the states’ finances. In his Budget speech, Kerala Finance Minister Thomas Isaac’s said: "The average growth of the state expenditure during the period from 2013-14 to 2018-19 was 16.13 per cent, whereas the revenue income during the period rose only by 13.26 per cent. This gap between income and expenditure has accelerated the crisis... the revenue deficit could be reduced and the state could be led towards a stable financial path by increasing revenue income by 18-20 per cent. However, the expected growth in GST collection has not been materialised."

 28 Feb 2020, 09:59 AM