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One-Third of State Revenue to Be Outside GST Purview

Updated on: Jul 13th, 2021

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3 min read

Updates from 15th May, 2017

GST is well on its way to being implemented on the appointed day. However, new research shows that as much as one-third of the revenue from states may be out of the purview of the new tax regime. Petroleum, oil and lubricants, real estate, and alcohol contribute about 37% of the tax revenue in most states.

Keeping these sectors outside the purview of the GST tax not only goes against the motto of ‘one nation, one tax’ but also against the crackdown on the illegal trade that GST is supposed to represent. During the current fiscal year, the revenue from alcohol sales alone is projected to be around INR 83,300 crores with states like Karnataka and Kerala at the top of the list.

As reported in Economic Times

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Quick Summary

Despite progress in GST implementation, new research reveals potential revenue loss. Key sectors like petroleum, real estate, and alcohol remain outside GST purview, contradicting the 'one nation, one tax' principle and impeding illegal trade crackdowns. Alcohol sales bring substantial revenue, notably in states like Karnataka and Kerala. Challenges persist in aligning all sectors with the GST regime.

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