Goods and Services (State compensation for loss of revenue) act Current Affairs - 2019
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The GST Council has decided to set up a seven-member committee to look into revenue shortfall being faced by the states after the GST roll-out, and suggest steps for augmenting collections.
The committee would be headed by Deputy Chief Minister and Finance Minister of Bihar Sushil Modi. Other members of the committee include Punjab Finance Minister Manpreet Singh Badal, Kerala Finance Minister Thomas Isaac, Karnataka Rural Development Minister Krishna Byre Gowda, Odisha Finance Minister Shashi Bhushan Behera, Haryana Taxation Minister Capt Abhimanyu and Goa Panchayat Minister Mauvin Godinho.
Terms of Reference of the Committee
The committee headed by Sushil Modi will look into the following aspects:
- Analyse reasons for the shortfall in revenue collections by the states since July 2017.
- Undertake data analysis using econometric and statistical tools and suggest suitable measures and policy interventions for course correction for revenue augmentation, particularly for the states suffering high revenue shortfall.
- Look into account trends of revenue collection before and after implementation of goods and services tax.
- Structural patterns of major sectors of the economy impacting revenue collection, including the services sector.
- Identify reasons for deviation in revenue collection trends, compare it with original assumptions worked out at the time of design and implementation of GST.
- Only Andhra Pradesh and five northeastern states — Mizoram, Andhra Pradesh, Manipur, Sikkim and Nagaland — have recorded revenue increase post the GST roll out.
Revenue Trends under GST Regime
The GST revenue data shows the following trends:
- A large number of States including Punjab, Himachal Pradesh, Chattisgarh, Uttarakhand, Jammu and Kashmir, Odisha, Goa, Bihar, Gujarat and Delhi are facing revenue shortfall following the implementation of goods and services tax.
- The revenue shortfall experienced by these states was in the range of 14-37 per cent.
- Among the Union Territories, Puducherry is facing a maximum shortfall of 43 per cent.
The Goods and Services (State compensation for loss of revenue) act provides for compensation to the states for loss of revenue arising on the account of implementation of the Goods and Services Tax for a period of 5 Years and the projected revenue nominal growth rate for a state during the transition period shall be 14% per annum.
Tags: Andhra Pradesh • Goa Panchayat Minister Mauvin Godinho. • GoM on GST revenue • Goods and Services (State compensation for loss of revenue) act • GST Council • Haryana Taxation Minister Capt Abhimanyu • Karnataka Rural Development Minister Krishna Byre Gowda • Kerala Finance Minister Thomas Isaac • Manipur • Mizoram • Nagaland • Odisha Finance Minister Shashi Bhushan Behera • Punjab Finance Minister Manpreet Singh Badal • Sikkim • Sushil Modi