FPJ Exclusive: Slowdown pricks state GST balloon

Mumbai: The economic slowdown is expected to deflate Maharashtra Government's Sales Tax/VAT and GST target for 2019-20 of Rs 39378 crore and Rs 113260 crore, respectively.

The state finance department, in its presentation to Chief Minister Uddhav Thackeray, has indicated that there will be a shortfall of about Rs 10,000 crore to Rs 15,000 crore, if the economy continues to flounder.

Also Read: GST Council to review revenue position, compensation cess on Dec 18

The finance department has also hinted that the fall in state GST and sales tax/VAT will result in capital expenditure constraints, which will impinge on development projects. GST and sales/VAT together constitute nearly 67% of the State's tax revenue, which is estimated at Rs 2.10 lakh crore plus.

Already the dip in consumption of petrol and diesel has impacted the sales tax/VAT collection. Further, the diminishing growth in manufacturing and core sectors, especially automobile, has adversely impacted the GST collection.

Only in October, due to festive demand, there was a slight pick-up but the finance department said this won't be the situation in the coming months, unless there is an economic revival.

A state finance department officer told the FJP, ''The total tax revenue of Maharashtra is pegged at Rs 2,10,824 crore plus in the 2019-20 estimate. The tax to GSDP ratio target is 7.1% in 2019-20."