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Authors: N. Ramalingam , Anitha Kumary L | Published on: 12-Oct-2020
Tax revenue contributes around two third of the total revenue receipts of Kerala. It constitutes states' own tax revenue and union's share of taxes by finance commission devolutions. As per the accounts of 2018-19, state's own tax revenue figured 72.7 per cent of the total tax revenue. The major revenue turners of the State's Own Tax Revenue (SOTR) are Goods and Services Tax (GST), sales tax from petrol, diesel and alcohol and back log remittances from Value Added Tax (VAT). The other SOTR are state excise duties, tax on vehicles, stamps and registration, land revenue and taxes and duties on electricity. The comparison of percentage of tax revenue on Gross State Domestic Product (GSDP) at current prices for the year 2020-21 with the past two years discloses realistic budgeted expectations for the state (Table 1). But the COVID-19 crisis has lopsided the revenue flow for the first quarter (Table 2).
Table 1. Components of tax revenue and their share in GSDP
|
Sl. |
Particulars |
Rs. Crore |
Percentage share on GSDP |
||||
|
2020-21 (BE) |
2019-20 (RE) |
2018-19 |
2020-21 (BE) |
2019-20 (RE) |
2018-19 (Accounts) |
||
|
1 |
Revenue Receipts |
114636 |
99043 |
92854 |
11.72 |
11.36 |
11.88 |
|
2 |
Tax Revenue |
88355 |
74671 |
69682 |
9.03 |
8.57 |
8.91 |
|
3 |
Own Tax Revenues |
67420 |
55671 |
50644 |
6.89 |
6.39 |
6.48 |
|
4 |
GST |
32388 |
23690 |
21015 |
3.31 |
2.72 |
2.69 |
|
5 |
Sales Tax and VAT |
23623 |
21148 |
19226 |
2.42 |
2.43 |
2.46 |
|
6 |
Land Revenue |
376 |
305 |
203 |
0.04 |
0.03 |
0.03 |
|
7 |
Excise Duty |
2801 |
2610 |
2521 |
0.29 |
0.3 |
0.32 |
|
8 |
Stamp and Registration |
4306 |
3915 |
3693 |
0.44 |
0.45 |
0.47 |
|
9 |
Motor Vehicle Tax |
3968 |
3709 |
3709 |
0.41 |
0.43 |
0.47 |
|
10 |
Other Taxes |
694 |
295 |
278 |
0.07 |
0.03 |
0.04 |
|
11 |
Share in Taxes |
20935 |
19000 |
19038 |
2.14 |
2.18 |
2.44 |
|
12 |
GST Compensation |
|
4721 |
2884 |
|
|
|
|
13 |
GSDP |
978064 |
871534 |
781653 |
|
|
|
Table 2. Tax revenue 2020 - Quarter -1 (Rs.Crores)
|
Sl. |
Particulars |
April to June 2020 |
April to June 2019 |
Revenue difference (+/-) 2020 over 2019 |
Growth Rate 2020 over 2019 |
|
1 |
GST |
2990.29(39.70) |
6596.62(42.44) |
-3606.3 |
-54.7 |
|
2 |
Taxes on sales, Trade* |
1600.18(21.24) |
4131.25(26.58) |
-2531.1 |
-61.3 |
|
3 |
Stamp duty and registration |
418.24(5.55) |
840.19(5.41) |
-422 |
-50.2 |
|
4 |
Land Revenue |
101.84(1.35) |
79.38(0.51) |
22.5 |
28.3 |
|
5 |
State Excise duties |
374.29(4.97) |
568.8(3.66) |
-194.5 |
-34.2 |
|
6 |
Other Taxes and Duties** |
346.47(4.60) |
975.12(6.27) |
-628.7 |
-64.5 |
|
7 |
States share of Union Taxes |
1701.8(22.59) |
2350.35 (15.12) |
-648.6 |
-27.6 |
|
8 |
Total Tax Revenue (Quarter1) |
7533.11 (100) |
15541.71 (100) |
-8008.6 |
-51.5 |
* Includes tax on vehicles, electricity duty and other taxes
** Figures in the parenthesis shows percentage share
Source: Computed from C&AG Data
Components of State's own tax revenue
1. Goods and Services Tax [GST]: During the first year of the introduction GST, the collection was Rs 14,302 crore (SGST plus IGST settlement) and Rs. 2102 crore due to GST compensation. (Period 1-7-2017 to 31-3-2018). During the second year (2018-19) the revenue was Rs. 24,651 crore and compensation was to the tune of Rs.3532 crore. A marginal upward trend felt during the third year (2019-20), Rs.25,864.9 crore with a compensation amount of Rs.3743 crore. The current year (2020-21) budgeted estimate pegged it to Rs.32,388 crore.
2.Sales Tax and VAT: The remittances from non-GST components like petrol, diesel, alcohol and VAT arrears was Rs.19,225.8 crore during the year 2018-19 which comes to 37.9 percent of the state's own tax revenue.
3. Excise Duty: Excise duty is levied by State on the manufacturing point of liquor in Kerala. During 2018-19, excise duty collected was Rs.2541.4 crore.
4. Stamp Duty and Registration: The amount collected as Stamp duty and registration fee was Rs.3693.2crore in 2018-19.
5. Land Revenue: The land revenue collection during the year 2018-19 was Rs. 202.78 crore accounting for 0.40 per cent of state's own tax revenue.
6. Taxes on Vehicles: Motor vehicle tax collection during the year 2018-19 was Rs. 3708.6crore.
7. Other Taxes: Taxes and duties on electricity, tax on goods and passengers and others contribute Rs.277.7crore during 2018-19.
|
GST Compensation GST (Compensation to States) Act 2017 guarantees 100 per cent compensation for revenue loss for a period of five years since the introduction of GST. The GST revenue loss to a State is the difference between the actual revenue collected from GST and the projected revenue by considering 14 percent yearly increase, base year being 2015-16. The compensation amount is being met through the 'GST Compensation Cess' levied on items such as luxury cars, tobacco products, cigarettes, pan masala, aerated drinks etc
|
Tax revenue: The first quarter picture
The data of the Comptroller and Auditor General of India (C&AG) published as unaudited provisional figures on the tax revenue of states as monthly key indicators are taken for analysis. (Refer Box 1 for brief explanation of the taxes as perceived by C&AG).
Gulati Institute of Finance and Taxation