Telangana is not eligible to get July’s GST compensation

HYDERABAD:  Even  as the Central government is floundering on how to pay compensation to the States for Goods and Services Tax (GST), it does not affect Telangana as the State is not eligible for compensation, since it has had a better GST realisation than other States.

The GST Council meeting with a single-point agenda of how to pay compensation to States whose GST collections fell below 14 per cent, is scheduled to be held on Thursday. The Council is also contemplating the idea of raising loans to pay the compensations. Interestingly, Telangana’s GST revenue growth has improved from June.

The State, which received compensation in the first quarter of this financial year, will not get any compensation for July. "We have improved our GST collections after the unlock began. The State registered huge growth in GST collections in July, and so we will not get GST compensation for July," an official source said.

Officials also averred that the State may not get any GST compensation in future too, as the State’s tax collections were back to normal. As Telangana has nothing to do with the single-point agenda of compensation, it remains to be seen what stand Finance Minister T Harish Rao will take at the meeting.