Daijiworld Media Network - Bengaluru (MS)

Bengaluru, May 29: In spite of the anxiety in the reduction of tax revenue after the introduction of GST on July 1, 2017, there is an increase of 13% in the commercial tax revenue of the state government of Karnataka.

In addition to the state GST tax revenue, the compensation grant released by the central government and the sales tax collected by the sale of diesel and petrol, the total tax collected for the year 2017-18 is better than that of the last year. This has brought a joy to the officers of the commercial tax department, who expected the increase at around 9% after the introduction of the GST.

Commercial tax department used to collect good amount of tax through the Value Added Tax (VAT), that was prevalent earlier. On an average Rs 4000 crore to Rs 4200 crore of tax was collected every month. When GST was introduced in last July there was apprehension that it might upset the revenue collection.

Rs 27,567 crore collected in form of tax

From July 1, 2017, to March 31, 2018, Rs 27,567 crore has been collected as tax under GST. The central government had assured that it will pay to the state government, the difference amount in the tax if the same is not equivalent to an additional 14% from the amount that was collected as tax in the year 2015-16. Accordingly, the central government has released an amount of Rs 6245 crores for the period of July 2017 to February 2018.

Reasons for rising tax revenue

The state government imposes a sales tax of 30% and 20% on the petrol and diesel respectively that is being sold in the state. As the price of the diesel and petrol is rising continuously since last year, there is also an increase in the tax revenue that is collected.

The tax that was imposed on certain selected goods during the introduction of the GST was later reduced. As the GST was reduced from 28% to 18%, 18% to 12% and 12% to 5%, the volume of business transactions increased and this also has contributed to the additional tax income of the government.