E-Paper
Punjab’s kitty got ₹30,713-crore GST boost in 2020-21
State saw 39% jump in goods and services tax revenue, including compensation from the central government, in comparison to ₹22,099 crore in 2019-20
Punjab received a financial boost from the goods and services tax (GST) during the financial year 2020-21, thanks to the highest-ever compensation and sharp recovery in collections after the Covid-19 pandemic hit the state economy.
The cash-strapped state government received ₹30,713 crore from GST, including compensation from the central government, in 2020-21 as against ₹22,099 crore during the previous financial year, according to data compiled by the taxation department. The 39% increase in GST revenue has provided a considerable financial wiggle room to the state government that has less than a year to go for the assembly polls, allowing it to release pending bills and payments and give a push to welfare schemes.
105% JUMP IN GST COMPENSATION FROM CENTRE
The indirect tax funds include GST compensation of ₹18,050 crore which is more than double, 105% to be precise, the amount of ₹8,805 crore received by the state government from the central government in financial year 2019-20. The compensation is for shortfall in the state’s monthly protected revenue of ₹2,403 crore last year in addition to some pending claims, a department official said. At the time of switching to GST, the central government had guaranteed 14% year-on-year growth over the revenue base in 2015-16 and agreed to compensate the state for any shortfall. The Centre has borrowed funds to give compensation to the states as tax collections were severely hit due to the Covid-19 pandemic last year.
COLLECTIONS POINT TO ECONOMIC RECOVERY
The state’s GST revenue signalled a significant pickup in economic activity, nearly matching the revenue in 2019-20 revenue, after the coronavirus-induced lockdown in the first two months of the year gone by. The collections including state GST (SGST) and integrated GST (IGST) settlement stood at ₹12,663 crore in 2020-21, down 4.7% from ₹13,300 in the previous year, which is a considerable improvement from the first half when the mop-up was sluggish. The state’s revenue collection for the April-September period of 2020-21 was down by 31% year-on-year and started picking up as lockdown restrictions were eased gradually. Additional chief secretary, taxation, A Venu Prasad said the GST amount is at a “historic high” as the department pursued GST compensation claims vigorously with the central government and filed claims on time which also helped settlement of some compensation claims of previous years. “Our GST and excise teams carried out strict enforcement and launching crackdowns on those indulging in tax frauds and illicit liquor trade,” he said.
DOUBLE-DIGIT GROWTH IN EXCISE, VAT REVENUES
The increase in excise and value-added tax revenues also provided relief to the state government. The excise collection jumped by 21% year-on-year, going to ₹6091.21 crore in 2020-21 from ₹5,022.36 crore. Besides release of additional quota that fetched extra ₹450 crore, action against illegal distillers and smugglers under Operation Red Rose also saw collections go up. VAT and central sales tax collections, which mostly come from diesel, petrol and other petroleum productions, swelled by 13%.
