HYDERABAD: States appear to have overestimated State Goods and Services Tax (SGST) revenue and GST compensation by Rs 11,000 crore and Rs 11,100 crore respectively in FY19, according to ratings firm ICRA.
A comparative study of 18 states showed substantial discrepancies between data provided with the Rajya Sabha (RS) for FY19 and individual states’ forecasts for FY20 budget estimates — that includes revised estimates of FY19 — leading ICRA to conclude that most states may have overestimated SGST revenue and GST compensation for FY19.
According to the estimates, aggregate SGST collections of 18 states stood at Rs 2,64,200 crore in FY18 — a modest Rs 1,600 crore higher than the information provided with RS. “The FY18 fiscal data included in the respective state budgets are the audited actuals and therefore should presumably be correct. We are unclear as to why there are mild discrepancies in the SGST collections mentioned in some states’ budgets and the information available from RS,” it added.
As for the deviation in GST compensation received in FY18, data available with RS, the government released GST compensation to each of the 18 states in FY18 aggregating to Rs 36,500 crore.
Further, 10 of the 18 states have explicitly stated that GST compensation in their respective budgets in FY18 either under the grants from the Centre or under SGST aggregating to Rs 20,600 crore. Seven of the 10 states (Karnataka, Punjab, Rajasthan, Kerala, Chhattisgarh, Haryana and Tamil Nadu) reported the same amount of Goods and Services Tax (GST) compensation for FY18 in their respective state budgets.
“There appears to be a reporting issue in the budgets of the remaining eight states; possibly the correct magnitude of GST compensation has been included in their revenue receipts, but not explicitly reported as a separate line item in FY18,” it noted.
Further, ICRA’s analysis of the revised estimates (RE) of revenue receipts of 17 of the 18 states and the eventual revenue receipts for FY16 to FY18, showed that the latter were six-seven per cent lower than the revised estimates.
“Accordingly, it is possible that the SGST collections and GST compensation indicated by some of the states in the FY19 RE may subsequently be revised lower,” it noted.
While data for SGST revenue of 12 states during FY18 was largely consistent, the difference was marginal for five states, while one state showed a substantial discrepancy.