Gujarat fails to meet GST revenue target, again

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Gujarat has failed to meet its annual growth target of 14% of Goods and Services Tax (GST) in the first quarter of the financial year 2019-20 after it achieved just 6.2% growth. Earlier this year, the State had failed to achieve the target after it recorded 12.72% growth in the financial year 2018-19. The State has collected Rs 24,662 crore GST in the first quarter of 2019-20. During the same period last year, it had collected Rs 23,211 as GST revenues, reflecting a growth of 6.2% this year. Gujarat ranks 13 in the list of 14 States, only better than Kerala which recorded a 4.7% growth rate in the first quarter. Odisha topped the list with a growth rate of 20.8% in the first quarter of 2019-20. While the deficit is currently being financed by the Centre as a way of compensation, Gujarat stares at a humongous challenge as the manufacturing-heavy State will have to fend for itself once the Centre withdraws financial support after five years.

With challenges like under-reporting and fake invoicing, the State GST officials are preparing themselves to increase the number of assessees and revenue. A senior official of the tax department blamed the manufacturing-heavy nature of the State for the comparatively lower GST revenues in the State. He said, “To increase the number of assessees, we are undertaking data analytics to find out businesses which were registered under the previous tax regime but have suddenly disappeared now. The complaint mechanism is also being improved, reducing the chances of tax evasion.” Bhargav Thakkar, Vice President of Gujarat Chamber of Commerce and Industry told Mirror, “There is recession all around, due to which many businesses are affected, leading to a reduced collection as compared to other States. Once the businesses flourish, the collection is going to rise significantly. The government, keeping in mind the dynamic ecosystem, must review their policies at regular intervals to help the businesses flourish.” 

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