On Sunday, the Telangana State government passed the Goods and Services Tax Bill, 2017, unanimously. The GDT which will roll out on July 1st will not include liquor and petroleum products. The taxes for these commodities will be decided by the state government.
The Finance Minister Eetala Rajendra speaking about this said, “There will be one tax and that will be GST. Though final tax rates are yet to be known, we are hopeful of increased revenue with the introduction of GST.” The Centre after passing the GST on March 31 asked the states to pass GST in respective legislatures, The Telangana Government passed bill subsequently stating the tax laws related to VAT, entry tax of goods, entertainment tax, luxury tax, entry tax for vehicles, horse races and betting tax and also rural development and advertisement tax.
The State is expecting a Service Tax of 15% from the Centre. The finance minister also predicts a growth of 35% service tax every year, which will increase the flow of funds to the state. For the financial year 2015-16 government expects Rs. 16,201 crores revenue and for 2017-18 a total revenue of Rs. 21,055 crores. But as the GST is being released in July, the state expects a revenue of Rs. 15,971 crores.
A senior official from Finance Department said that the state will be at the receiving end as the centre promised compensation to those states which record growth rate of 14 % or below it. After the TRS government took charge, the state showed a growth of more than 15% and 21% increased tax collections. He said, “GST compensation will be paid if the growth in tax revenue is less than 14 per cent, a condition that is not much beneficial for the state. Manufacturing states like Telangana will give more to Centre than it collects as tax.”
