Mumbai, Dec11 (The Press Watch) – Chief Minister Uddhav Thackeray in a letter to Union Finance Minister Smt. Nirmala Sitaraman has requested to release its ‘Legitimate dues’ of Rs. 15,558 crore to Maharashtra expeditiously. The Chief Minister expressed his concern about reduction in GST compensation and its effect on developmental works in the State.
As per the Union Budget 2019-20, the tax devolution to Maharashtra is Rs. 46,630 Cr. which is 11.15 per cent more than Rs. 41,952 Cr. received by the State during 2018-19. But, the State has received an amount of Rs. 20,254 Cr. only till the month of October 2019, which is less by Rs. 6,946 Cr. (-25.53%) as compared to Budget estimate for the year 2019-20. So instead of receiving an enhanced amount the State has received less than the budgeted amount. With further slowdown of the economy during the second quarter, it is likely that there will be a further reduction in tax devolution, Thackeray said in the letter.
He further informed that because of the slowdown in the economy, there is a shortfall in GST collections compared to the benchmark growth of 14 per cent. During the current financial year, the State received Rs. 5,635 Cr. as GST compensation for the first four months only. However, an amount of Rs. 8,611 Cr. is due as GST compensation up to November 2019.
The GST settlement was done during 2017-18 based on the tax devolution formula of the Finance Commission, instead of the formula adopted for the IGST settlement. As per CAG Report No.11 of 2019, for the year ended March 2018, it is noticed that IGST settlement for many transactions is not happening. This is partly responsible for accumulation of huge unsettle balance under IGST. This has resulted in a shortfall of IGST settlement due to the State, Thackeray elaborated to the Centre.