State yet to get bi-monthly payout compensation

Ambika Sharma

Tribune News Service

Solan, November 25

The state government was yet to get the bi-monthly payout compensation for the August-September period under the goods and service tax (GST) regime thus aggravating its grim financial situation.

Himachal was among several other states whose payout compensation for this period, which is payable by October end, has been inordinately delayed. While non-BJP states like Punjab have raised their concern about this delay before the Central Government, Himachal being a BJP-ruled state has not made any hue and cry about it.

Excise and Taxation, Commissioner, Ajay Sharma, said as against about Rs 1,800 crore payout compensation for this fiscal, the state has received only about Rs 750 crore till now and about Rs 1100 crore, including the bi-monthly GST payout compensation of August-September, were pending.

Notably, the state is ranked at the third lowest position among all states in GST revenue generation and it faced a revenue shortfall of 36 per cent. Though the state has improved its ranking from being placed at the second lowest position after Puducherry last year, it was yet to make substantial progress in improving its GST revenue.

The state faces a fiscal deficit of Rs 7,352 crore. It has limited revenue generating areas. The delay in Central compensation has further aggravated its fiscal woes.

The state has to step up its GST revenue collection in light of the fact that the Centre was under no legal obligation to make up for the shortfall from the Consolidated Fund of India. Under the GST (Compensation to States) Act, 2017, a state is supposed to be compensated for the loss of revenue if its revenue growth if lower than 14 per cent annually for the first five years opined tax experts.

Notably, the state faced several handicaps which inhibited robust tax collection. A large section of the staff was engaged in clearing the pending VAT assessments and the department not only lacked dedicated staff to handle the GST but its officials lacked the apt know how to handle the GST portal. A section of officials said that the need to provide extensive training to officials, including assistant commissioners, deputy commissioners and joint commissioners, to run all modules of the GST tax administration was the need of the hour.

ETC, Ajay Sharma, however, added that the GST revenue had registered an increase of 27 per cent this quarter vis-à-vis last year and an action plan has been chalked out to grant extensive training to all officials on how to handle GST-based interventions. Apart from this, a one-time settlement scheme for pending VAT assessment, which would not only bring the pending revenue but will also enable officials to focus more on GST, was also on the anvil.

He said factors like under invoicing, bogus billing and dip in industrial growth also added to the revenue shortfall and efforts were underway to devise effective strategy to step up GST revenue.