Speaking at the National Seminar on GST, organised by ASSOCHAM, Gulati said, “If we see GST revenues, the average growth year after year is only about 2 per cent. That is a bit of a worry for both the states and the Centre.”
Expressing concern over the poor revenue growth under the Goods and Services Tax (GST), pegged at about 2 per cent, Additional Commissioner of state tax in the Gujarat government, Surpreet Singh Gulati, on Friday said that the new tax regime has led to unsettled revenues, thus pulling down the growth rate of the economy. Speaking at the National Seminar on GST, organised by ASSOCHAM, Gulati said, “If we see GST revenues, the average growth year after year is only about 2 per cent. That is a bit of a worry for both the states and the Centre.”
Explaining that the amount of unsettled money in the economy is supposed to go to the consuming states as compensation, he said,GST is supposed to go to the consuming states rather than the producing states. But they are the biggest losers right now.”
“As of today, the amount of unsettled IGST is Rs 1.8 lakh crore. Given that there is large unsettled revenue, the amount of compensation given to states right now is becoming a bit of a theoretical exercise and does not have too many policy implications,” Gulati added.
Taking the example of Gujarat, he said that the state got a Rs 5,000 cr compensation after the implementation of GST which suggests that the state’s revenue was under a Rs 5,000 cr loss. These issues, Gulati said, would soon be sorted out with the implementation of the new revenue system and after the annual tax returns are filed.
The tax officer, however, added that “despite hiccups” in the GST implementation, the economy did not face inflation pressures.
“And three things contributed to it – the GST design, the independent monetary policy of the RBI and the international oil prices. The pressure of inflation is seen across all the countries that implemented GST, we too had a serious risk of being in the inflationary stage but that did not happen,” he added.
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