Bengal GST revenue up

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The Narendra Modi-led Centre has congratulated the Mamata Banerjee government for the turnaround in West Bengal’s revenue collections after the rollout of GST.

Union finance secretary Hasmukh Adhia had written to state chief secretary Maloy De on April 13, praising the state for overcoming the revenue shortfall. Banerjee has tweeted that the Centre congratulated Bengal for not only rapidly bringing down the revenue gap in state GST but also registering a revenue surplus in March 2018.

Incidentally, Bengal has reported an overall 16% jump in revenue collections — from Rs 45,000 crore in 2016-17 to Rs 52,690 crore in 2017-18, the first year of GST.

According to Adhia’s letter, the revenue gap exists at the national level even in March. “As you are aware, the performance of GST collection is improving, of course with some ups and downs. The overall revenue gap in SGST (state GST) collection for the whole country in July was 28.3%, which has come down to 17.9% in March. However, there have been spikes….in November, December and February.”

A revenue gap exists if collections under the GST regime fall short of 14% growth compared to last year’s. In such cases, states are entitled to compensation from the Centre. The shortfall is now calculated on a monthly basis as GST was launched in a truncated financial year (in July).
Adhia’s letter adds that Bengal’s revenue gap has fallen from 33.4% in August to -3% in March 2018. “The revenue shortfall in West Bengal has been coming down steadily, but there seems to have been a spike of a major gain in March, where suddenly your revenue deficit has now become revenue surplus,” it said.
Significantly, Banerjee also tweeted that the state’s revenue performance had been far better than that of the country as a whole. “Where Bengal achieved a surplus of 3% in March 2018, the country as a whole registered a revenue deficit of 17.9% in March 2018,” she added. From January, the state’s shortfall was lower than the national average.