PANAJI
The Centre is due to pay Goa Rs 250 crore in Goods and Services Tax backlog, Transport Minister Mauvin Godinho said on Tuesday, even as he said the decision of the GST Council to drop tourism-related taxation from 28 per cent to 18 per cent in 2019 had increased tourist footfalls to Goa as well as the rest of India, making India a competent global tourism destination.
"Rs 250 crore is pending, but we will get it in due time," said Godinho, soon after he was re-appointed the State's representative on the GST Council.
Explaining the delay in clearing the backlog by the Centre, Godinho said that the dues were accrued during the Covid pandemic, when the economy was at a low ebb.
"During the pandemic, collection was extremely low. As a result up to five years, June 22, the Centre pays compensation cess (to states). The cess is collected from sin goods and luxury goods. That cess is paid back to the State as a compensation for what you have lost after implementing GST. After five years, you are expected to stand on your own feet. There was a shortfall in that payment," the Minister explained.
"There was a gap wherein the Centre was not able to pay because the collection never took place. When the pandemic was there everybody was locked inside their homes. What consumption can take place, whether luxury goods or otherwise. Obviously there was no money with the government," he further said.
In order to compensate the states and generate revenue, the Centre, Godinho said, had availed of loans to tide over the crisis.
Godinho also said that the GST Council had decided to lower tourism-related taxes at a meeting of the Council in 2019.
"At one time there was a 28 percent tax (on tourism-related goods and services). After a lot of negotiations, when there was a GST Council meeting in Goa, we brought it down to 18 percent. Why did we bring it down to 18 percent. We have to ultimately compare our taxation with other tourist destinations," he said.
"28 percent was 10 percent more (than in competing destinations), therefore quality tourists did not want to come here. Now (with the decrease) footfalls have increased not only in Goa, in all the country, even in a place like Delhi. In fact my recommendation was to make it 12 per cent to compare ourselves completely with other tourist destinations, so we could have had more tourists in Goa," he said, adding that now with the tourism sector bouncing back, Goa's GST collection had correspondingly increased.
