State’s revenue growth fails to match national average

IGST released by Centre falls due to recovery of `1,125 cr ‘excess sanction’ in previous years

Despite the claims of the commercial tax department that it has plugged all loopholes, growth in revenue was lesser than the national average. Even as the country registered the highest-ever GST mopup of `2.10 lakh crore for April, up by 13 per cent, the state recorded an 11 per cent increase from `5,622 crore in April 2023 to `6,236 crore in April this year.

The Union finance ministry said the revenue figures for April represented 12.4 per cent gross growth. The net revenue remaining with the ministry after refunds was `1.92 lakh crore, a rise of 15.5 per cent compared to the corresponding month last year.

The states which saw the highest rise were Delhi (23 per cent), Mizoram (46), Assam (21, Odisha (25), Puducherry (28). AP recorded 20 per cent growth in SGST cash collection, whereas Telangana state recorded 13 per cent, on par with the national average. The figure for Telangana state, however, fell to nine per cent after settlement.

The post-settlement figures are arrived at after considering IGST, a destination tax where the tax travels along with the goods and services and is accrued to the state where it is consumed. The ministry of finance and the GST Council in coordination with the GST network track the movement of goods and services and allocate IGST tax to states. The revenues of states are reckoned by adding this IGST amount to the SGST cash collected in each state. This is known as post IGST settlement revenue for SGST taxes.

Telangana had introduced stringent verification of e-waybills and detected bogus input tax credits by companies engaged in creating fake invoices. The department also brought in a two-tier verification process to make refunds. The department also started issuing way bills for petroleum products and liquor from other states recently.

Reacting to the revenue figures for 2023-24, a senior official from the department said, “The state has performed well in terms of SGST cash collections and is in the third position among larger states. However, IGST settlement amount released by the government of India is not on the same footing owing to the recovery of `1,125 crore made by the government of India citing excess sanction during the previous years. The settlement of reversals pertaining to two financial years made in FY2022-23 had led to higher growth in that financial year. The economic trends are positive.” Department officials are silent on breakdown of the revenue for petrol and liquor in April this year. Growth in revenue by the commercial tax department is key to the ability of the state government to honour its promises.