Centre short-changed Telangana on GST devolution of funds: Harish Rao

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Telangana State has been short-changed by the Centre when it comes to devolution of IGST funds, Finance Minister T Harish Rao said on Tuesday. The Centre owes Telangana more than what it says it does in terms of IGST devolution and it should give the State its rightful share of tax dues, Harish Rao said, in a strongly-worded letter to Union Finance Minister Nirmala Sitharaman. As against its total share of Rs 4,464 crore, Telangana only received Rs 1,652 crore and is entitled to the balance amount of Rs 2,812 crore.

Harish Rao stated that taking the actual position into consideration, including observations of Comptroller and Auditor General (CAG) and recommendations of the Finance Commission, Telangana’s share of IGST comes to a total of Rs 4,464 crore. Out of balance of Rs 1,76,688 crore, only Rs 67,998 crore was distributed to the States based on devolution formula. As a result, Telangana received Rs 1,652 crore as its share in tax devolution which is 2.437 percent, he said.

“As observed by the CAG in their report for 2017-18, owing to the huge unsettled balances in the IGST, the GST Council at its meeting on January 25, 2018, recommended advance settlement of Rs 35,000 crore to the Centre and the States on provisional basis based on the revenue from taxes of the State in 2015-16 subsumed under the GST. This was proposed to be adjusted in 10 equal installments against the regular settlement due in 2018-19,” he said.

The Finance Minister pointed out that as per CAG, the States’ share in IGST is 50 percent which works out to Rs 88,344 crore, but not Rs 67,998 crore as distributed by the Centre. Based on the procedure used for ad hoc settlement where Telangana’s share is 4.03 percent, the State is entitled to receive Rs 3,560 crore. “Even on the basis of devolution formula (2.437 percent), the State’s share works out to Rs 2,153 crore,” he observed.

Read More at: https://telanganatoday.com/centre-short-changed-telangana-on-gst-devolution-of-funds-harish-rao