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Karnataka takes Rs 10,675 crore coronavirus blow

Chief Minister BS Yediyurappa in his budget 2020-2021 speech had estimated State’s Own Tax Revenue, including GST compensation, at Rs 1,28,107 crore.

Published: 11th May 2020 05:47 AM  |   Last Updated: 11th May 2020 05:47 AM   |  A+A-

Karnataka CM BS Yediyurappa

Karnataka CM BS Yediyurappa

Express News Service

BENGALURU: With near-zero revenue collection in April, Karnataka has approximately lost Rs 10,675 crore in the form of State’s Own Tax Revenue. In the first month of the fiscal year 2020-2021, the State’s income from Commercial Tax, Excise, Stamps and Registration and Transportation (Motor Vehicles) was practically nil due to the nationwide lockdown over Covid-19. 

Chief Minister BS Yediyurappa in his budget 2020-2021 speech had estimated State’s Own Tax Revenue, including GST compensation, at Rs 1,28,107 crore. Revenue generation has barely started with economic activities resuming partially and liquor sales finally beginning in May, the approximate revenue loss in April stands at Rs 10,675 crore, which is 1/12th of the budget target estimates.

“The revenue is practically nil for April. We have not received revenue as budgeted. Since industries — the biggest contributors of GST — were also shut, very little is expected out of them. We are unlikely to get any revenue immediately even as economic activity is beginning now since the process is time-taking,” said a senior official from the Finance Department.

As per approximate estimates of 1/12th of budget target values, revenue collection for April under the Commercial tax sector should have been Rs 6,870.25 crore, under Excise, Rs 1,891.6 crore, under Stamps and Registration, Rs 1,054 crore and under Transport, Rs 592.91 crore.

For a cash-strapped Karnataka that has lost nearly all of its 1/12th estimated revenue for the fiscal year 2020-2021, the recent hike in Excise duty adding Rs 2,530 crore to initial revenue target of Rs 22,700 crore is unlikely to bring much relief. With the Union Finance Ministry extending the timeline to file GST returns, State is not hopeful of receiving GST compensation till July end. Meanwhile, the Centre owes Karnataka GST compensation from last fiscal year.

“We have received GST compensation until November 2019. Pending dues are a little more than Rs 5,000 crore,” said a senior Finance Department official. In the corresponding period last year, State had seen approximate collections of Rs 6,471.8 crore under Commercial Tax (Including GST compensation), Rs 910.8 crore under Stamps and Registrations, Rs 1,799.3 crore under Excise and Rs 481.66 crore under Transport (Motor Vehicle Tax) sector in April according to estimates in the Mid-year review of State Finances 2019-2020 presented to the State Legislature in October 2019.

In its budget 2020-2021, Karnataka has estimated revenue receipts at Rs 1,79,920 crore, State’s own tax revenue at Rs 1,28,107crore  and non-tax revenue at Rs 7,767 crore.

Sectors under State’s Own Tax Revenue

Commercial Tax (inclusive of GST compensation)

Excise Motor Vehicle Taxes

Taxes on Stamps and Registration 

More from Karnataka.

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