Kerala expects Rs3,000 crore additional revenue after GST implementation1 min read . Updated: 04 May 2017, 09:03 PM IST
State finance minister Thomas Isaac says Kerala hopes that Centre will rethink its plan to include petroleum products taxes under GST
Bengaluru: The Kerala government Thursday said it was expecting an additional revenue of at least Rs3,000 crore every year once goods and services tax (GST) is implemented.
“Our revenue will increase considerably... (the increase) is expected to touch Rs3,000 crore (per annum) once GST is implemented," state finance minister Thomas Isaac told the Kerala assembly during question hour.
Isaac also expressed hope that the Centre will rethink its plan to include taxes from petroleum products under GST.
Kerala collects about Rs14,000 crore as petroleum cess each year, which is crucial for the financial planning for the present Left Front government, especially one of its flagship initiatives called the Kerala Infrastructure Investment Fund Board (KIIFB).
The idea behind KIIFB is to mobilize Rs50,000 crore from the market in the next five years, and spend it for boosting infrastructure and social sector. The state was planning to make repayments by deducting a portion of its own tax revenue like petroleum cess towards KIIFB.
If petroleum products come under GST, the state government will not be able to collect the cess anymore and the plans for KIIFB will have to be reworked, said Isaac. He suggested diverting a portion of the state’s other tax revenues to KIIFB but indicated that other revenues are already hit by demonetisation.
In short, if petroleum products come under GST, KIIFB investments will be hit by an estimated 15%, Isaac said.
The minister added that in the first year, the state will not wait for the Centre’s GST compensation and will go about with effective tax collection wherever the state’s rights in collection of taxes is maintained.
PTI contributed to the story.