Telangana will pitch for tweaking of procedures to pave way for the regular monthly release of State’s share of tax in the Integrated Goods and Services Tax (IGST).

This, along with some other pending proposals for GST rate cuts, will be raised in the 28th GST Council meeting to be held at New Delhi on July 21.

The Centre has been releasing the IGST amount due to the State once in three to four months. For instance, the State received Rs. 1,700 crore IGST after a gap of three months recently.

Release after returns

This is because the Centre has been releasing the IGST on inter-State supply of goods and services only after the filing of returns by the concerned. If the amount is disbursed to the State under IGST every month, it will be convenient for the State to regulate its expenditure, sources said.

The Centre knows the amount to be released to a State under the IGST and so it should release at least 50% of amount due immediately, they said.

The State is hopeful that the GST Council would consider its long-pending request to bring down GST rate on Tandur, Napa or Shabad stone from 18% to 12%. The Tandur stone is used mostly for houses by common people and poor and also if used in public work used to be levied 5% tax before the GST.

Tax on Tandur stone

The tax on Tandur stone shot up to 28% under GST hitting employment generation by these units.

Subsequently, it was brought down to 18% but the State has been appealing to bring it further down to 12% to help the local stone units facing competition from the cheaper Chinese goods.

The State will also press for implementation of reverse charge mechanism – in case of supplies made by unregistered persons to registered persons, the receiver has to pay the tax to the government by making the self-invoicing for the purchases made. The GST Council is expected to bring down the tax rate on ethanol used in biofuel from 18% to 12%. State may lose some revenue due to this, they added.

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