Telangana not to get GST compensation

State sought adequate safeguards from the Centre: Eatala

RAYALASEEMA,KURNOOL(AP) Police personnels aressting by TRS MLA Eatala rajender for sadak bandh on thursday PHOTO:U.SUBRAMANYAM

Finance Minister Eatala Rajender informed the Legislative Council on Monday that Telangana did not stand a chance of getting compensation from the Central government for implementing the Goods and Services Tax from July 1 as it was a high-tax growth State.

With 16.5% of State’s Own Tax Revenue, Telangana was in the higher slab of tax growth among States and, therefore, there was no question of being compensated by the Centre. The compensation would be paid to only those States with a growth under 14 per cent, Mr. Rajender said in his reply to the debate on the Appropriation Bill which was later passed by the Council.

Tax collection

He, however, said the Telangana government had sought adequate safeguards from the Centre for implementing the GST. The government insisted that the public not be burdened, State’s rights in collection of taxes be maintained, with effective tax collection either by Central and State machinery and strict vigil on tax evasion without enhancing tax rates.

The Centre promised to consider the State’s request to be allowed to collect tax from businesses whose annual turnover was less than Rs 1.5 crore. The State government was assessing if it could raise taxes from service sector in Hyderabad which was earlier the domain of the Centre.

Mr. Rajender added that another reason for Telangana losing out on compensation from the Centre for implementation of the GST was that it was neither among major goods-producing or consuming States that would suffer losses after the regime came into force. The losses of such States would be compensated for five years.

Seeks financial help

He hoped the Centre would extend financial assistance to Telangana at least this year as the most happening State along with Andhra Pradesh, Gujarat and Karnataka. Telangana had sent utilisation certificates to the Centre for assistance of Rs 8,260 crore.

On huge difference between budget and revised estimates by Telangana government every year, Mr. Rajender said the difference was only 15 to 16 per cent as in other States. It was only projected budget when it was presented to the Assembly before the commencement of the year. The revision was made at the end of the year as the projected income from sale of lands and Central assistance that was promised in bifurcation law as a new State did not materialise in the previous years. Nevertheless, the State mopped up its own tax revenue in a big way and stood high in performance index.