Bengaluru: Karnataka faced a revenue shortfall of about Rs600 crore in July due to “GSTN glitches", state agriculture minister Krishna Byre Gowda said on Thursday.
“The revenue shortfall for July appears to be somewhere around Rs600 crore. The revenue for August could probably increase and decrease, depending on improvement or weakening of tax compliance. The decrease in revenues for July was due to Goods and Services Tax Network (GSTN) glitches," he told PTI.
The GSTN is the technology backbone for GST and administers registration, invoice uploading, tax return filing and tax payment system under the new indirect tax regime.
Asked how soon the glitches would be solved, Gowda, who represents Karnataka in the GST Council, said it would start showing results starting from another 15 days going up to November.
“The vendor, Infosys, has understood the gravity of the problem and is working to rise to the occasion to help overcome the challenges," Gowda said. However, the vendor is not directly answerable to GST Council, but it is for the GSTN to ask pertinent questions on the glitches, the minister said.
Moreover, it will be difficult to predict accurately the quantum of revenue shortfall because of the unavailability of accurate data, he said.
Replying to a query on compensation schedule to be given by the Centre, Gowda said unlike many other states, Karnataka is, financially, in a better position. “Many states are under tremendous pressure, even to pay salaries to their staff. They have asked for compensation in advance," he said.
On e-commerce firms having issues with tax collected at source (TCS), Gowda said the Council has been very considerate to these firms. On an appeal from Karnataka, TCS on e-commerce was lowered to 1% with 0.5% each of central goods and services tax (CGST) and state goods and services tax (SGST), Gowda said.
“Earlier, TCS on e-commerce was proposed at 2%, but was capped at 4% after legal rewording," he added. Gowda said the government did not give in to their demands of doing away with TCS altogether as it would defeat the very purpose of plugging tax evasions. “The best solution left to us was to lower the tax rate so that their working capital is not hindered too much," he said.