Karan Sehgal
PANAJI
At a time when it is difficult to raise tax revenue, the State government is losing Rs 10 crore every month because goods and services tax (GST) rate was slashed for hotels in September 2019.
The GST Council had reduced the tax rate from 28% to 18% on hotels charging more than Rs 7,500 per day tariff in its Sept meeting. In addition, it had also reduced the tax rate from 18% to 12% on hotels charging per day tariff between Rs 1,001 and Rs 7,500.
As a result, the government is not able to grow its GST collections at a significant rate. Commissioner of Commercial Taxes, Dipak M Bandekar, said, “We are losing Rs 10 crore per month due to GST reduction on hotels.”
“In December 2019, State share in GST (SGST) stood at Rs 134.74 crore compared to Rs 126.36 crore in December 2018, which shows a growth of 6.6%,” Bandekar added.
6.6% growth at best is modest. In earlier years, the government’s tax collections would grow sharply from November onwards due to the onset of tourism season.
But this year, partly due to low turnout of tourists and partly due to reduction in hotels GST rate, the government’s GST collections have not grown much.
Bandekar said, “The inter-state GST collections jumped from Rs 50.93 cr in December 2018 to Rs 97.43 crore in December 2019 showing a massive growth of 91.3%.”
IGST is on inter-state movement of goods. Recently, the GST Council had amended the rules as per which businesses have to mandatorily take the credit of IGST before they take credit of SGST and Central Government’s share of GST (CGST).
