One-third of State Taxes To Stay Out of GST

The process of implementing the ‘biggest economic recovery’ of GST from July 1 is going on fast. Even though the Central and State Governments are welcoming GST openly, they have kept around one-third of the revenues out of the realm of GST, so that consumers can not get the benefits of cheap goods and services.

According to a study conducted in 2017-18 of 17 states on the tax collection by Motilal Oswal, there are 37 percent tax collection in these 17 states with liquor, real estate and petroleum products. Keep in mind that the Goods and Services related to these are still excluded from the GST scope. Even though the annual review is kept in the oil sector but this is not so in alcohol and real estate.

State Finance Ministers have managed to maintain their control in these three sectors. These three sectors are considered to be the highest tax collection, so that the state will be able to complete its renaissance target.

It is believed that only black money is created in alcohol and real estate sectors. The purpose of bringing GST was to eliminate the repeated taxation (cascading effect) and to make the economy more transparent and to eliminate leakage in tax collection.

It is clear that the economy of one-third of the states will not be able to benefit GST. Analysts led by Motilal Oswal have been lead by economist Nikhil Gupta. This was done in 17 large states in Unileys, which accounted for 85 percent of national GDP. Out of these states, Karnataka is dependent on the highest alcohol consumption of revenues.

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