Jammu and Kashmir has witnessed over 30% dip in GST collection for the period April-August 2020. According to official data, the GST revenue across India has witnessed 30.4% decline during this period in comparison to corresponding period of the last year.
J&K figures among the top states/union territories which have witnessed sharp decline in GST collections.
As per the figures, J&K has realized Rs 1,169 crore in GST during this period, which is 30.5% less. During April-Aug 2019-2020 it had collected Rs 1680 crore GST.
The official figures reveal that J&K’s GST compensation from the central government has also witnessed decline. In 2019-2020, the UT had received Rs 2279.29 crore as compensation from the centre, in the current fiscal so far it has received just Rs 1230 crore.
Since the introduction of one country one tax regime which was implemented during BJP-PDP regime in the erstwhile state, J&K has received total compensation of Rs 6108 crore.
As per section 7 GST (Compensation to States) Act, 2017, loss of revenue to the states shall be calculated and released at the end of every two months’ period, for 5 years by the centre. But the GST compensation is yet to be paid for the period April-July, 2020.
The issue of pending GST compensation and future course of action to meet the GST compensation shortfall was discussed at the 41st GST Council meeting on 27.08.2020 wherein States were given option to meet their GST compensation shortfall for current FY from market borrowing.
A senior finance department official said, “J&K will have to go for market borrowing if the centre refuses to compensate for the GST shortfall which has been recorded due to the situation arising out of COVID pandemic reducing the revenue streams of the government.”