GST: Karnataka loses Rs 10,000 crore tax revenue in one month of lockdown
With the trade and industry shutting down their businesses since the beginning of the lockdown on March 25, the Karnataka state government has suffered a loss of around Rs 10,000 crore by way of taxes under various heads. The turnover loss for trade and industry is estimated in the range of Rs 1.5 lakh crore.
According to data available with the state department of commercial taxes, so far in the month of April, the state has earned close to Rs 1,000 crore from VAT on petrol and diesel, and Rs 1,500 crore from GST, which is barely 20 per cent of its normal collections. Meanwhile, the state government is yet to get GST compensation to the tune of Rs 3,500 crore from the Central government for the months of February and March 2020.
In addition to this, professional tax amounting to Rs 900 crore for the month of April will not be there as the government has deferred the date for depositing the tax to May 31. The central government has allowed businesses to submit their GST returns for March, April and May till June 30. The loss of excise duty from the sale of liquor is estimated at Rs 1,900 crore for April.
There are an estimated 8 lakh businesses including MSMEs in the state that have shut down their operations since March 25.
The state government has set a target of collecting Rs 1,28,106 crore under GST, stamps and registration, motor vehicle tax and state excise for the fiscal 2020-21, which is a growth of 7.5 per cent over the previous fiscal. For the fiscal ended March 2020, the state government collected Rs 1,19,000 crore from various taxes.
“GST is the main source of revenue for the state government and with 80% of the businesses shut down for more than a month now, there will be a massive drop in the state’s own tax revenue. As a result, the budget targets for tax collections this year are unlikely to be achieved,” B T Manohar, tax expert from FKCCI told DH.
He said, the business was normal in the state only till the middle of March and with the state observing Janata Curfew on March 22, the business started declining and was halted from March 25 onwards. This resulted in the massive decline in the trade and tax collections for the government.
According to C R Janardhan, President, FKCCI, the trade and industry has lost turnover close to Rs 1.50 lakh crore in the last one month. The trade body has demanded the state government to take care of the wages of MSMEs for one month and defer fixed charges on electricity for one year.
Source- Deccan Herald.
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