RANCHI: Jharkhand may face the brunt of being a manufacturing state once the GST comes into force and according to rough estimates may suffer losses of Rs1,000 crore annually. However, as promised by the Centre, any state suffering losses due to the introduction of the GST will be compensated in entirety.
The estimated loss figures have not yet been calculated due to the possibility of inclusion of more industries of the service sector for which homestate would be considered the point of supply or consuming point.
Parliamentary affairs minister Saryu Rai told TOI that according to rough estimates the state may lose revenue of around Rs1,000 cr as goods manufactured in the state will no longer be taxed here. Instead, they will be taxed at the destination state where the end product reaches.
“The GST proposes to change the point of taxation and instead of manufacturer being targeted it would be the consumers from where the tax will be collected,” he said.
Admitting that the figures of gain and losses have to be dynamically calculated, additional chief secretary, finance cum planning Amit Khare said that out of the annual revenue target of Rs24,000 Cr the largest component is commercial taxes which is to the tune of Rs 13,500 Cr, which will be impacted after the imposition of GST.
“Out of several goods, three have been kept out of the purview of GST which includes petrol, diesel and liquor,” he said clarifying that the state would continue to fix their own taxes on these items.
Another breather for Jharkhand comes in the form of taxes on minerals and royalty over it which has also been kept out of the purview of GST. Khare said that the revenue from the mines is targeted at Rs7,600 Cr which will remain unaffected as the GST bill proposes to keep minerals and mines at the disposal of respective states.
“Excise revenue is targeted at Rs1,500 Cr which is also going to remain unaffected because it has been kept out of GST,” he said adding that the service sector is picking pace in the state.
“Till date, the Centre used to collect service tax but once the GST is introduced consuming point for all forms of services would be considered in the consuming state and in that regard Jharkhand can be a major gainer,” he said explaining why calculations of loss and gains at this stage in exact terms was not possible.
Source : http://timesofindia.indiatimes.com/city/ranchi/GST-to-take-1kcr-off-state-bottomline/articleshow/53749062.cms