CHENNAI: Tamil Nadu’s fears over the GST have been proven to be unfounded as eight months after its roll out, GST has raked in more money for the state exchequer than the erstwhile conventional VAT-based taxation system. Data of the state commercial tax department show that the state received Rs 23,317.76 crore under GST from July to December 2017, as against Rs 19,017.87 crore under VAT during the corresponding period the previous year.
The state GST, called SGST, was around Rs 15,008.10 crore between July and December last year. The state will add a few more crores to its coffers from the inter-state GST as many assessees are yet to file their returns.
Tamil Nadu being a manufacturing state and GST being a consumption-based tax, former chief minister J Jayalalithaa had opposed rolling out the new tax structure. She wanted the Centre to compensate for the revenue loss if GST revenue was less than VAT. But now it has been proven that Tamil Nadu is not only a manufacturing state but also a consumption state too.
“When the GST was rolled out there was a belief that governments like Uttar Pradesh and Bihar, where the consumption is high, will get more revenue. But as the months went by after GST was rolled out, we found that apart from being a consumption state, Tamil Nadu also has the financial power to purchase goods and services,” said a senior GST official.
Tamil Nadu has the second highest number of companies and individuals registered under GST. “The state also stands second in terms of GST revenue in the country. Under inter-state GST (IGST), we received Rs 4,483 crore. But this is only a part of the total revenue under IGST, which we have to get. There are around 6 to 7 components which an assessee has to file under GST and only after all these are filed and taxes paid, will Tamil Nadu get its share of IGST,” said the official.
The state received nearly Rs 1,000 crore as compensation since the GST was introduced as the tax revenue was less than VAT revenue of 2015-16 – which was taken as the base year – during the initial months. But in subsequent months, after seeing the GST revenue being more than VAT, Centre has deducted the compensation while giving Tamil Nadu’s share of IGST.
“In Tamil Nadu, consumption of commodities in the 18-28% GST bracket is high. High-end cars, two-wheelers and white goods are some of the items which earn more revenue to the state,” the official said.