The Karnataka government will write to the Centre seeking an extension of the GST compensation beyond 2022.
A decision in this regard was taken at a review meeting Chief Minister B S Yediyurappa chaired on the departments of commercial taxes and excise on Monday.
According to sources, the request for extension will be made before the next GST Council, owing to the revenue shortfall faced by states.
Due to economic slowdown amid the Covid-19 pandemic, revenue growth under the GST regime was below the expected level of 12 per cent per annum, leading to severe fiscal stress for the states.
Despite adverse market conditions caused by the lockdown, the Commercial Taxes department has collected Rs 11,409 crore this fiscal, which is 14.92 per cent of the annual target of around Rs 76,400 crore. The Excise department has mopped up Rs 4,284.05 crore in April and May, against the annual target of Rs 24,580 crore.
Yediyurappa said that tax collection was satisfactory and predicted an increase in revenue generation for the government once lockdown restrictions are lifted across the state. According to a release from the Chief Minister's Office (CMO), Karnataka stands second in the country in GST collections.
The CM also directed officials to initiate strict measures to prevent tax leakage.
Published 14 June 2021, 16:45 IST