Telangana may lose Rs 7,000 cr annually due to GST rate rationalisation, says Deputy CM Vikramarka

Hyderabad/New Delhi, Aug 29 (PTI) With the proposed GST rate rationalisation, Telangana is estimated to lose nearly Rs 7,000 crore annually, Deputy Chief Minister Bhatti Vikramarka said on Friday, requesting the Centre to properly compensate states for the losses expected from the new tax measure.

Addressing the media in the national capital, Vikramarka said Telangana’s accumulated losses since the introduction of GST are estimated to be nearly Rs 80,000 crore.

"Estimates are saying that Telangana alone may lose Rs 7,000 crore annually (after the GST rate rationalisation). So when a state is estimated to lose Rs 7,000 to Rs 10,000 crore, it would impact welfare and developmental programmes of the respective states. However, we welcome the rate rationalisation and request the Centre to properly compensate," Vikramarka said.

In order to compensate states for the losses due to rate rationalisation, the Centre should channel the revenue collected from taxes or cess on sin and luxury products to the states, he opined.

He further said that had GST not been there, Telangana would have got tax revenue of Rs 69,373 crore during 2024-25. However, the state earned Rs 42,443 crore only through GST.

"Because of the GST, in only 2024-25, we have lost Rs 27,000 crore (tax revenue). Cumulatively the state has lost Rs 80,000 crore," he said, adding that the state government would request the Centre to consider compensating the losses.

Finance ministers from eight states -- Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal -- met in Delhi today and decided to present their proposal to the GST Council at the next meeting on September 3 and 4.

Vikramarka said that when the GST was introduced, the Central government had "assured" a 14 per cent growth in states' tax revenues, and if not achieved, the shortfall would be compensated until the system stabilised. But unfortunately, the anticipated stability has not taken place as still it is hovering between 7 per cent and 8 per cent.

The Telangana Deputy CM said although some states cannot publicly express the pain they are suffering due to losses from GST, it remains a pertinent issue. PTI GDK GDK KH