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Coronavirus lockdown: In five months, J&K records 30% dip in GST collection

Last Updated 15 September 2020, 08:26 IST

The Goods and Services Tax (GST) gross revenues for the period April-August 2020 in Jammu and Kashmir came at Rs 1,169 crore which marks the decline of 30% to the same period last year, according to official data.

The decline in revenue collections is a result of the lockdown that has been in force since March to control the spread of Covid-19 mirroring a widening slowdown in the economy triggered by shrinking consumer demand.

Across the country, the average monthly GST collection in the April-August period was down by nearly 30% compared with the same period a year ago. J&K figures among the top states/union territories which have witnessed sharp decline in GST collections.

The official figures reveal that J&K’s GST compensation from the central government has also witnessed decline. In 2019-2020, the UT had received Rs 2279.29 crore as compensation from the centre, in the current fiscal so far it has received just Rs 1230 crore.

Since the introduction of one country one tax regime in July 2017, J&K has received total compensation of Rs 6108 crore. As per section 7 GST (Compensation to States) Act, 2017, loss of revenue to the states shall be calculated and released at the end of every two months’ period, for 5 years by the centre. But the GST compensation is yet to be paid for the period April-July, 2020.

In the current fiscal year, states/UTs are staring at a staggering Rs 2.35 lakh crore GST revenue shortfall. The Centre late last month gave two options to the states to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 lakh crore from market. It has also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing.

A senior officer of J&K Finance department said the UT will have to go for market borrowing if the centre refuses to compensate for the GST shortfall which has been recorded due to the situation arising out of Covid-19 pandemic reducing the revenue streams of the government.

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(Published 15 September 2020, 08:26 IST)

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