Revenue growth rate slows down post-GST rollout

Centre compensates for loss as guaranteed under GST Act

Five months after the roll-out of the Goods and Services Tax (GST) across the country, Telangana’s momentum of growth in commercial tax revenue seemed to have slowed down.

While the growth rate for eight months of commercial tax revenue from April to November last year was 13.22 %, it was only 7.86% for the corresponding period of 2017-18.

Of the eight months, first three months was under the old tax regime as GST came into effect from July.

Growth rate

Commercial tax and other sources of revenue in Telangana registered less than 14% growth rate in certain components under the GST.

The Centre compensated for the loss as guaranteed under the GST Act.

State received a compensation of Rs. 7 crore in the first two months — July and August — and Rs. 162 crore for September and October.

What helped the State keep itself afloat with overall growth rate of more than 14% was its impressive growth in VAT revenue on petroleum products and liquor because petroleum and liquor are outside the GST purview.

No consolation

Sources said that the growth could have been at least 3% to 4% higher than that of previous year without the disruption caused by the GST regime.

The compensation given by the Centre offers no consolation as the State had lost much more revenue due to slow down of growth rate.

Despite demonetisation high denomination currency notes, Telangana had registered the highest growth rate of 20.8% in the country during 2016-17.


There are many reasons for the fall in the GST revenue, more so in November, sources say.

The Centre has reduced the GST rates on many goods, extended the last date for filing of GST returns and increased the turnover limit of businesses.

Another view point

There is, however, a view that fall in revenue post-GST is a temporary phenomenon as tax compliance is bound to increase.

“ Goods and Services Tax is a big reform and initial teething troubles are common. One should give at least one year for the new system to stabilise. One should not make the GST a scapegoat without a proper analysis,” say some officials.


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