UP’s GST revenue growth rate better than national average

Over a year after the Goods and Services Tax (GST) rollout, Uttar Pradesh has emerged as one of the top performers in terms of filing of returns by dealers and consequent revenue collection.

“UP’s average GST revenue growth rate at 13.81% so far is better than the national average of 9.85%,” a commercial tax department official said. .

The Modi government has already given the state a pat on its back for this achievement.

The country observed the first anniversary of the GST rollout on July 1.

“Only two or three states are ahead of Uttar Pradesh in performance with regard to filing of returns and maintaining revenue collection with the result that the UP’s dependence on the Centre for compensation for revenue shortfall is getting reduced constantly,” additional commissioner, GST, Vivek Kumar claimed.

He said there was always scope for improvement but the present achievement was notable.

The GST Act provides for protection of states’ revenue at annual growth of 14 % with the Central government being under obligation to compensate any shortfall for next five years from the roll out of the GST.

A perusal of the data available with the commercial tax department here, however, shows UP’s revenue shortfall has considerably decreased from 13.5% in August 2017 to just 7.6% in April 2018.

The state’s total revenue in the first month after the GST was ₹3,124.04 crore against the projected revenue of ₹3,612.77 crore. It got ₹488.73 crore compensation from the Centre to make up for the 13.5% shortfall. The shortfall increased to 27.1% in September but reduced to 17.2% in October and further went down to 15.6% in November. The gap marginally increased to 18.2% in December but again decreased to 13.1% in January 2018 and went up to 18.7% in February. In March, it was 12.5% and in April it further narrowed down to 7.6%.

The May revenue collected in June shows a quantum jump and the state expects only marginal or no revenue shortfall in the month. “We have been able to achieve 158.21% of the target at 67.47% growth in June which will further reduce the revenue gap,” a commercial tax department official said.

In a letter to the UP chief secretary on April 13, the Centre’s revenue secretary Hasmukh Adhia wrote, “As far as Uttar Pradesh is concerned, the revenue gap has come down from 27.1% in September to 12.5% in March 2018. Uttar Pradesh has consistently good performance, better than national average.”

“I hope that revenue gap in respect to Uttar Pradesh will be converted into revenue surplus very soon,” he said.

UP’s better revenue collection is being attributed largely to its success in making the taxable dealers file returns every month, besides registering a record number of new dealers/traders under the GST regime.

“We added around seven lakh new dealers to the tax net in just one year which is a record besides making more than 82% of the total around 9 lakh eligible tax payers file their returns regularly,” Vivek Kumar pointed out.

Further data analysis reveals 7,67,229 of the total 9,25,181 active dealers filed their returns in March, which was 82.93% of the total and the highest in the country after Punjab, Gujarat and Haryana with 88.20%, 84.45% and 83.26% respectively.

THE FLIP SIDE

Though UP has emerged as one of the best performers, it is believed that the state, as chief minister Yogi Adityanath himself pointed out at a function on Friday, has not been able to perform to its potential. “Being the country’s largest consumer state, UP can still do better considering the fact that GST as a destination-based tax benefits states where the products are finally consumed,” said a commercial tax official who did not wish to be named.