Implementation of GST J&K get less compensation of Rs.1046 Cr against actual loss
Following the implementation of Goods and Services Tax (GST), the Jammu and Kashmir received less compensation of Rs.1046.07 Crore against the actual loss of Rs.2,078.07 Crore.
The data was revealed by the Comptroller and Auditor General (CAG) of India in its Union Territory Finances Audit Report, Jammu and Kashmir State (Upto 30 October 2019).
The Goods and Service Tax Act was passed in Parliament on 29 March 2017 and came into effect on 01 July 2017. Whereas, in Jammu and Kashmir, GST came into existence a week later.
As per the GST (Compensation to States) Act, 2017, States will be compensated for the shortfall in revenue arising on account of implementation of the Goods and Services Tax considering an annual growth of 14 per cent from the base year, for a period of 5 years.
The centre levies the Integrated GST (IGST) on inter-state supply of goods and services and apportions the State’s share of tax to the State where the goods or services are consumed. State Government implemented the Goods and Services Tax (GST) Act, which became effective from 08 July 2017.
The compensation payable to the State shall be calculated for every financial year after the receipt of final revenue figures, as audited by the CAG of India. The base year (2015-16) revenue figure was finalized under the GST Act.
“In case of Jammu and Kashmir, the Revenue was Rs.4,766.30 crore during the base year (2015-16)”,the CAG report said.
The protected revenue for any year in a State shall be calculated by applying the projected growth rate (14 per cent per annum) over the base year revenue. The protected revenue for the year 2019-20 in accordance with base year figure was Rs.8,050.09 crore, the report reads.
“The protected revenue for the seven month period (01 April 2019 to 30 October 2019) was Rs.4,695.88 Crore. Against the protected revenue, the Revenue Receipt of the State Government under GST, including collection of taxes subsumed in GST during the period 2019-20 (01 April 2019 to 30 October 2019) remained at Rs.2,617.81 Crore”, the CAG said in its report.
“Against the actual loss of Rs.2,078.07 Crore due to implementation of GST, the State Government received compensation of Rs.1,032 Crore during the period 01 April 2019 to 30 October 2019. It has resulted in less compensation to the extent of Rs.1046.07 Crore. The audit report reads, during the year 2019-20 (01 April 2019 to 30 October 2019), the total collection under SGST was Rs.2,604 Crore”.
As per the report, the monthly revenue to be protected amount was Rs.670.84 Cr each from April to October 2019. The Jammu and Kashmir State was supposed to receive Rs.146.08 Cr compensation in April, to which the State received zero rupees.
May, the Jammu and Kashmir State was supposed to receive Rs.275.78 Cr compensation, to which the State received Rs.228 Cr. While against the compensation of Rs.249.71 Cr in June, the Jammu and Kashmir State received zero rupees.
In July, against the compensation of Rs.424.44 Cr, the Jammu and Kashmir state received Rs.334 Cr. While in August, the Jammu and Kashmir state was supposed to receive Rs.105.99 Cr, to which the State received zero rupees.
In September, the Jammu and Kashmir state had to receive Rs.448.97 Cr, to which the State received Rs 470 Crore. In October, the Jammu and Kashmir state was supposed to receive Rs.427.1 Cr, of which the State received zero rupees.
