Chief Minister Sangma Highlights Revenue Collection Pitfalls Under GST

Meghalaya Chief Minister Dr. Mukul Sangma stated that revenue collection under GST (Goods and Services Tax) was not assessed suitably on account of the system’s incapability. Dr. Sangma is spearheading the Congress led Meghalaya Government and hit out at the NDA (National Democratic Alliance) for disabling input tax credit for infrastructure creation including hotels and other structures in the tourism segment while it has been enabled for other infrastructure. The Meghalaya cabinet received a briefing on the realization of revenue collection across multiple departments under the new taxation system.

According to Dr. Mukul Sangma, after rolling out the new taxation system, the registered taxpayer count under GST is 9, 546 out of a total of 25, 852 registered previously under the VAT (Value Added Tax) regime. This also includes 5, 752 new taxpayers who have obtained GST registration according to Dr. Sangma. The Chief Minister stated that just 40% of taxpayers have successfully filed returns due to the incapabilities of the system that is there. According to him, all the taxpayers registered under GST have to file returns. However, they are really facing loads of issues due to system related problems. As a result, revenue realization is unclear, i.e. whether it will be as expected or not.

The state was expecting higher revenue realization as compared to the 14-15% projections according to Dr. Mukul Sangma. He stated that revenue collection could never be assessed due to system linked incapabilities. He hit out at the BJP spearheaded NDA Alliance for tapping bigger investors by not giving provision for input tax credit in the tourism industry while going forward with the implementation of GST. He talked of how total clarity is required and why the investors in the hospitality sector are being targeted. According to Dr. Sangma, he will be writing to seek greater clarity on this matter. GST implementation should have been simpler and should not be imposed like a Gabbar Singh tax.

The decision of the Central Government to not give permission for input tax credit in the tourism segment will lead to people being discouraged from making investments. According to the Chief Minister, the situation is ironical since there are several tourism promotion schemes that the Central Government has in its kitty. The entire issue will be highlighted politically and Dr. Sangma confirmed that he would be writing to other Chief Ministers on this matter.