GST: Commercial taxes, registrations help State net higher revenue
Both heads record higher growth rate as compared with last year
The State government, concerned about growing expenditure, has reason to feel relieved. Revenue collections from commercial taxes and registration of land documents during the first half of the current financial year have seen a higher rate of growth as compared to the corresponding period in the previous year.
If this trend continues in the second half of the year, with no sudden spurt in revenue expenditure, the State may be able to bring down the revenue deficit.
Even though indications of the current trend were evident in the previous year (2017-18), officials monitoring the revenue collections are also conscious of the rising revenue expenditure, due to a variety of factors.
Drain on resources
The factors include the fallout of of the implementation of the Seventh Pay Commission’s recommendations, receipt of a large number of claims for pension revision, spillover in expenditure for schemes related to distribution of laptops and bicycles for students, absorption by the government of the losses of the Tamil Nadu Generation and Distribution Corporation, conversion of the losses into grants and commitments for interest payments.
“Had there been no such growth rate in revenue collections, the government would have been in a soup,” an official said.
As for the collections through commercial taxes, there are two broad components – one falling under State-level Value Added Tax and another under the Goods and Services Tax (GST), which came into effect on July 1, 2017. If one were to go by the collections through GST [which is a destination-based or consumption-based tax], the data point to Tamil Nadu being as good a consuming State as any other.
Prior to the launch of GST, the apprehension expressed by Tamil Nadu and many others was that GST would result in heavy revenue loss. It was for this reason that a compensation scheme, projecting 14% growth rate of revenue during the transition period of five years, had been framed.
Another official pointed out that “we are able to touch the growth rate of 11% to 12% in respect of GST items. It is only a matter of time before we cross the threshold of 14%, after which we may not get compensation.”
For the current year, a sum of ₹308 crore was paid in this regard.
With regard to VAT items, the continuing rise in prices of petroleum products is primarily responsible for the higher growth rate.
On the collections from registrations, a revival in the real estate industry aided by sale or resale of properties in the light of a regularisation scheme for unapproved layouts/plots has been cited as the main reason.
The officials also point out that of late, the Registration Department has begun implementing certain measures for the benefit of people. Among the measures is the introduction of an online facility to ascertain the status of registration of documents and the issue of receipts to those who register land documents for ownership transfer in rural areas so that new owners can download “patta” documents online.
Source- The Hindu.
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