With the trade and industry shutting down their businesses since the beginning of the lockdown on March 25, the state government has suered a loss of around Rs 10,000 crore by way of taxes under various heads. The turnover loss for trade and industry is estimated in the range of Rs 1.5 lakh crore.
According to data available with the state department of commercial taxes, so far in the month of April, the state has earned close to Rs 1,000 crore from VAT on petrol and diesel, and Rs 1,500 crore from GST, which is barely 20% of its normal collections. Meanwhile, the state government is yet to get GST compensation to the tune of Rs 3,500 crore from the Central government for the months of February and March 2020.
In addition to this, professional tax amounting to Rs 900 crore for the month of April will not be there, as the government has deferred the date for depositing the tax to May 31. The central government has allowed businesses to submit their GST returns for March, April and May till June 30. The loss of excise duty from the sale of liquor is estimated at Rs 1,900 crore for April. There are an estimated 8 lakh businesses including MSMEs in the state that have shut down their operations since March 25.
The state government has set a target of collecting Rs 1,28,106 crore under GST, stamps and registration, motor vehicle tax and state excise for the fiscal year 2020-21, which is a growth of 7.5% “GST is the main source of revenue for the state government and with 80% of the businesses shut down for more than a month now, there will be a massive drop in the state’s own tax revenue. As a result, the budget targets for tax collections this year are unlikely to be achieved,” B T Manohar, tax expert from FKCCI told DH