GST: Gujarat government estimates Rs 4,000 crore hit on revenues

    The lockdown for the Covid-19 pandemic may lead to a revenue loss of Rs 3,000-4,000 crore to the state, sources in the government said on Friday. Lower GST collection stemming from complete shutdown of manufacturing and service sectors, drastic reduction in income from electricity duties, and lack of real estate transactions will take their toll, sources said.

    “Revenue collection under various heads increase in March due to the end of the financial year. But this time, GST collection is expected to drop sharply and the Centre’s share will also plummet. The shutdown in real estate and other sectors has stifled income from stamp duty and registration fees,” said a senior government official. He said the government is also staring at a drop in revenues generated from sales of motor vehicles, and electricity duty from from industries.

    “Collectively, the loss of overall income of the state government may extend to Rs 3,000-4,000 crore,” he said.

    The official said the possibility of reduction in grants-in-aid from the central government can’t be ruled out as the Union government will also be facing similar reduction in revenues. “Things will be clearer only after the lockdown is lifted and tallies made,” the official said.

    Sources added that the impact of the lockdown may last for about two quarters after the lockdown period and state government revenues will continue to be hit for some time. “The state government may have to borrow more money to fund the state’s planned expenditure as budget allocation has already been announced. The government may also have to announce additional resource allocation after the lockdown is over,’’ said an official.

    Source- Times of India.

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