GST Collection Is About To Increase But States Revenue Could Be Decrease According To Crisil Report | GST: Revenue growth of states will decline despite increase in GST collection, expected to be 7-9 percent
GST: Despite the good GST collection, the revenue growth of...
GST: Despite the good GST collection, the revenue growth of the states may come down to seven to nine per cent in the current financial year. This has been said in a report by rating agency Crisil. This report was prepared after assessing 17 states contributing 90 percent to the Gross State Domestic Product (GSDP). The agency said that the share of states in the central tax may increase further in the current financial year. As a result of this, the revenue growth of the states is expected to be low, while the overall GST collection is expected to grow well.
Despite the increase in GST collection, the revenue growth of the states will fall to 7-9 percent – Report
In the report given on GST collection, it was told that during the outbreak of the epidemic in 2020-21, the revenue growth was less and compared to that in 2021-22 it was at a better level of 25 percent. Crisil said in the report that in the financial year 2022-23, good taxation will boost revenue growth. GST collections and transfers from the Center together account for 45 per cent of the revenue received by the states and are expected to grow in double digits (10 per cent or more).
State GST collections show a significant increase
The agency’s senior director Anuj Sethi said that the revenue growth would be driven the most by the entire state GST collection, which grew by 29 per cent in 2021-22. “We expect the growth momentum to continue and collections to grow by another 20 per cent in the current financial year. Improved compliance levels, an environment of rising inflation and sustained economic growth will help in this,” he said.
No change in fuel tax likely: Report
The growth rate of tax collection from the sale of petroleum products 8 to 9 percent will prove to be a factor affecting the growth rate of the states adversely, the Crisil report has expressed such apprehension. On the other hand, fuel tax collection is expected to remain almost unchanged as despite 25 per cent increase in sales, states will not be able to get the benefit due to tax cuts.
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