True to the indication given by the Government officials that there is no need to press the panic button as yet about shortfall of revenue in July, first month after the Goods and Services Tax roll out, the commercial tax revenue for the month of September showed a significant improvement.
The total tax collection including Value Added Tax collection in September this year, for the transactions done in the month of August was ₹3,142 crore against the target of ₹3,237 crore. The shortfall was ₹95 crore. This was way lower than the shortfall of close to ₹500 crore tax revenue in August credited to the Treasury for the commercial transactions done in July.
The shortfall is even less at ₹52.8 crore compared to the last year’s average collection from April to August, 2016. The improvement in the tax revenue of September is an indication that the trade is getting adjusted to the new GST regime and the initial problems experienced in filing returns under the GST regime and the technical glitches are being sorted out gradually.
Of the total tax collection of ₹3,142 crore collected in September, the VAT on petroleum products and liquor that are not under GST, was ₹1,413 crore.
The State share of GST was ₹807 crore and IGST (Inter State Supply of Goods or Services released to the State by the Centre by month-end) was ₹669 crore.
Sources said that compared to the tax collection under the old tax regime in September last year of ₹2,815 crore, this September collection registered a growth of 11.6%.
The average VAT collection from April to September of last year was ₹2,778 crore and growth over last year’s average collection is 13.1%.
The State of course estimated its revenue growth at 15% over that of last year and set its targets accordingly. But shortfall of ₹50 crore to ₹100 crore in the overall scheme of things should not raise eye brows and is normal.
Analysing the scenario, official sources said that things should further improve as time goes by and there was no reason for pessimism. Only two months have passed under the GST regime and in another four months, more clarity would come, they said.VAT on petrol, diesel
Interestingly Centre which has cut excise duty on petroleum products has been hinting that States should also follow suit and reduce VAT on petroleum products by 5% at least to give relief to consumers. The Union Finance Minister may formally write to all the States to this effect.
But Telangana, sources said, will take its time, wait for another six months, to assess its tax revenue under the GST and also wait to see the response of its neighbouring States - Andhra Pradesh, Tamil Nadu and Karnataka.
But it is matter of time before fuel is also brought under the GST, sources said. At present, VAT on petroleum products was higher in AP and slightly lower in Tamil Nadu and Karnataka than that of Telangana.
State which is persuading Centre to bring down GST on earth component works of public projects from 12% to 5% may use it as bargaining chip to reduce VAT on petroleum products in future.
