Taxing Times in Gujarat: Rs 35,000 Crore Listed As Non-recoverable

| Updated: June 10, 2022 9:44 am

Gujarat and other states will not receive compensation from the Centre to balance shielded GST revenue from next month, as the goods and services tax (GST) regime approaches its fifth year.

Gujarat has pending tax dues of Rs 60,000 crore, according to the state commercial tax department, at a time when the state’s average growth in tax collection is not meeting planned levels. GST, CST, and VAT are all included in this number, which is valid through February 2022. (VAT). According to department authorities, 58 percent of these, or Rs 35,000 crore, are designated as non-recoverable dues.

“The funds are stuck with the National Company Law Tribunal, or they belong to sick units, or a non-recovery certificate has been issued, or the companies have closed in some cases, or bogus dealers are untraceable. The pending recoveries are merely a loss to the state budget “according to a reliable source. 

The Centre promised protected revenue at a 14 percent growth rate when GST was implemented. Overall GST revenue has increased by 10.8 percent year on year over the last three years, i.e. in 2019, 2020, and 2021.

As a result, the state commercial tax department has shifted its emphasis to compliance and recovery. Department officials estimate that recoveries of Rs 60,000 crore are pending until February 2022.

Gujarat recently received compensation from the Centre worth Rs 3,336 crore, which included payments due until May 31, 2022. According to economic experts, the decline in state revenue will have an impact on the federal government’s capital expenditure.

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