Economy

Telangana loses Rs 800-crore revenue on GST rollout

Telangana loses Rs 800-crore revenue on GST rollout”

As much as ₹65,000 crore of the close to ₹95,000 crore tax collections in July have been claimed as transitional credit by taxpayers, prompting the CBEC to order a scrutiny of all cases above ₹1 crore.

The Goods and Services Tax (GST) regime, which came into effect from July 1, allows tax credit on stock purchased during the previous tax regime. Apart from transitional credit, government would also receive claims for input tax credit, the figure of which is not yet known.

"The possibility of claiming ineligible credit due to a mistake or confusion can not be ruled out". The state collected Rs 518 crore under central GST and hopes it will garner Rs 1,000 crore under Integrated GST (IGST) head.

While giving the break up of total GST revenue mop up, state tax authorities said Telangana received Rs 850 crore under state GST and Rs 690 crore from petroleum products. However, the exact quantum of claims against SGST is not immediately estimated.

Responding to this concern of industry, Sanjiv Srivastava, Commissioner, CBEC, said at a Confederation of Indian Industry (CII) event that the GST Council is seized of this matter and a resolution would be available within a month's time from now. Also, businesses have been allowed to revise the form once till October 31.

Till last week, as many as 70 per cent of 5.96 million taxpayers had filed returns for July, amounting to maiden revenue of Rs95,000 crore under the GST regime. Almost 70% of eligible 60 lakh taxpayers have filed returns for the first month of GST. Over Rs 7,000 crore has been collected from assorted cesses, created to compensate the states.

"The carry-forward of transitional credit is permitted only when such credit is also permissible under the Goods and Services Tax (GST) law". Under the section, ITC is not available for motor vehicles and other conveyance, food and beverage, outdoor catering, membership of a club and travel benefits, among others, unless these are used as input for further supply.

A list of assessees in the Delhi region, who have claimed more than Rs 1 crore as credit in their Tran-1 showed a firm even claiming up to Rs 228.82 crore as transitional credit.

"It would be advisable to formulate a uniform and transparent process for this exercise so that taxpayers are not subjected to any difficulty", said MS Mani, tax partner at Deloitte.

Transitional credit is the closing balance of input tax credit carried forward from earlier indirect tax regime to GST.



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