Himachal Pradesh government could not implement many of the procedures under the GST regime due to frequent changes in rules and regulations since its launch on July 1, 2017, a report by the Comptroller and Auditor General (CAG) of India on the revenue sector of the state for the year that ended on March 31 last year has revealed. The report said as per the model law approved by the Goods and Services Tax Council, the state government was prompt in its preparedness for implementation of goods and services tax under the Act and rules. It said that GSTN was not able to provide the complete IT solution regarding filing of returns. The state government was hamstrung in implementing the provisions of GST as it had limited role in these matters. A complete network system needs to be devised with required speed for successful implementation of GST Act, the CAG report added.
Filing of returns was postponed due to difficulties faced by the tax payers, the report said the excise and taxation department needs to sort out the legacy issues like assessments of pre-GST cases, recovery of arrears and refund of tax relating to pre-GST regime expeditiously in a time-bound and focused manner. The GST network (GSTN) had also not been able to provide the complete IT solution. While referring to trend of revenue, the report said GST was implemented from July 2017 and total receipts under GST including non-subsumed and subsumed taxes from April 2017 to March 2018 were Rs 4,843.86 crore (including IGST advance Rs 484.84 crore) against Rs 4,381.91 crore under pre-GST taxes during the same period of previous year 2016-17, an increase of 10.54%. It said 99% of the existing dealers received provisional ID from GSTN, but only 72.82% of the dealers completed the migration process and were finally registered under the GST. The department said the reason for short enrollment was that in the VAT regime, dealers having gross turnover (GTO) of Rs 5 lakh were to be registered, whereas, in GST, the dealers having GTO up to Rs 10 lakh were exempted from registration. Referring to the issue of recovering arrears, the report said as per information furnished by the department, arrears (VAT and CST) aggregating Rs 3,086.23 crore were pending as on April 1 last year. It said the department had classified the arrears in different categories.
Arrears of Rs 2,610.10 crore had been referred for recovery as arrears of land revenue, Rs 109.89 crore were stayed by the courts, Rs 16.69 crore was recoverable from government departments/undertakings/boards, Rs 27.88 crore was proposed to be written off, Rs 27.19 crore was pending under appeal and Rs 294.48 crore was recoverable from others. The report says that there was an increase in the overall tax revenue from Rs 5,120.91 crore in 2013-14 to Rs 7,107.67 crore in 2017-18. During the year 2017-18, the revenue raised by the state government (Rs 9,471.52 crore) was 35% of the total revenue receipts. The balance 65% of the receipts during 2017-18 was from the Government of India as the share of net proceeds of divisible central taxes and grants-in-aid. There was an increase in revenue receipts over previous year by Rs 1,102.72 crore. It said overall. non-tax revenue receipts increased from Rs 1,717.24 crore in 2016-17 to Rs 2,363.85 crore in 2017-18 (increase of Rs 646.61 crore or 38%). This was primarily on account of sharp increase in actual receipts from interest receipts, nonferrous, mining and metallurgical industries and miscellaneous general services as compared with actual receipts in 2016-17.