GST and VAT collection helped Maharashtra bring down revenue deficit
These revenues together helped the state government revise its estimated revenue receipts to Rs2.57 lakh crore in the budgetmumbai Updated: Mar 12, 2018 01:09 IST
If the Goods and Services Tax (GST) and Value Added Tax (VAT) collection had fallen below the government’s target, the revised revenue deficit for last fiscal would have been over Rs20,000 crore.
State finance department officials said GST and VAT of more than 1.05 lakh crore by end of February helped the government contain a ballooning deficit as it had allocated unbudgeted amount of Rs16,000 crore towards the farm loan waiver this fiscal.
The state government had pegged the estimated collection of the Sales and Value Added Tax to be at Rs92,839 crore in 2017-18 before the GST was rolled out. With sales tax subsumed in GST (excluding petroleum products and liquor), the government was initially wary about the collection. The revision of slabs and reduction of the GST on many goods including food at hotels in November ahead of the Gujarat elections last year, had dwindled the collection in subsequent months. But it improved once again with a surge in the last few months. The GST collection was Rs50,976 crore by this February end and the VAT collection was Rs55,410 crore. These revenues together helped the government to revise its estimated revenue receipts to Rs2.57 lakh crore in the budget presented on Friday from Rs2.43 lakh crore estimated last year.
Adding Rs16,000 crore towards the farm loan waiver allocated in current fiscal to the estimated deficit of Rs4,511crore would have taken the deficit to more than Rs20,000 crore. Besides the loan waiver, the state also paid out Rs11,804 crore as GST compensation to the municipal corporations.
“The collection of VAT, state GST and integrated GST and the compensation by the Centre has been Rs1.05 lakh crore by end of February. We expect at least Rs8,000 crore in the last month of the fiscal to take it up to Rs1.13 lakh crore, well beyond the revised target of Rs1.06 lakh crore. We have been experiencing buoyancy in GST in Maharashtra and we are expecting a rise in the collection next year,” said Rajiv Jalota, sales tax commissioner.
Now, the state government is counting on GST collection of Rs90,140 crore and VAT collection of Rs35,301 crore to achieve a bulk of its targeted revenue and retain the revenue deficit at Rs15,374 crore. The government is also expecting Rs2,100 crore more from the stamp duty and registration of the flats and establishments over its annual target of Rs21,000 crore. The state is also expecting 15% share of about Rs62,000 crore — the state’s share in integrated GST accumulated with the Centre — to be settled in a year. Maharashtra has seen 5.32 lakh tax payers under GST, taking the total number to 13.62 lakh traders after GST was rolled out on July 1 last year.
However, out of the total revenue, Rs12,700 crore (approximate) will have to be devolved to 25 municipal corporations as compensation of the sales and VAT collection from the GST and VAT collection.
This year, the government could weed out its dubious distinction of not meeting the revenue receipt targets set during budget. For example, in 2014-15, its revised estimate for revenue receipts was Rs1.80 lakh crore, while its actual collection was Rs1.65 lakh crore. Its revenue collection in 2015-16 was Rs1.85 lakh crore against the estimates of Rs1.98 lakh crore. In 2016-17, the government had expected a deficit of Rs14,377 crore, but it reduced it to Rs8,535 crore.
“The state finances are in absolutely good health comparing the previous government’s regime in the state and other states. I am sure we will be able to reduce this deficit of Rs15,374 crore estimated for 2018-19 by at least Rs4,000 crore. It is not true that gap between estimates and actual collection of the revenue is huge,” said finance minister Sudhir Mungantiwar.
First Published: Mar 12, 2018 01:09 IST