the goan I network
PANAJI
The recent decision of the Goods and Services Tax (GST) Council to reduce tax rate on a number of products is likely to cost the State government more than Rs 7 crore per month in tax revenue.
In its July 21 meeting, the GST Council had reduced tax on products like washing machines, fridges, vacuum cleaners, paints, ethanol and etc. This cut might have brought a cheer to the consumers but it means loss of tax revenue to the State Government.
A source, on the condition of anonymity, said, “approximately, the State Government will lose Rs 7 to Rs 10 crore per month because the GST Council has slashed tax rate on several products.”
GST Council had reduced tax rate on goods and consumer electronics like fridges, washing machines, vacuum cleaners and kitchen appliances from 28% to 18% now.
The per capita consumption of such products is much higher in Goa compared to other parts of India because Goa is a richer state. Therefore, the impact of tax cut will be more on Goa’s state finances than on other State governments in the country.
As it is, the State Government is not able to grow its tax revenue. In June 2018, the government had earned Rs 113.48 crore on account of state government’s share in GST (SGST), Rs 66.1 crore from inter-state GST (IGST) and another Rs 101.92 crore from value-added-tax (VAT) mainly on petroleum and liquor, which totals to Rs 281.5 crore.
At that level, the government’s commercial taxes collection grew by just 2.2% compared to June 2017’s figure, which stood at Rs 275.56 crore. In May 2018, the State Government had earned Rs 264.83 crore from commercial taxes, which was just 1.9% more than Rs 259.85 crore collection in May 2017.
With GST reduction on a number of products now, it seems difficult that the State Government will be able to grow its tax collections in the months to come.
