Telangana to adjust tax dues against subsidy arrears

​Hyderabad: Telangana government is in the process of resolving long-pending demand from the industry pertaining to clearing arrears of subsidy and other incentives. Towards this, the state government has decided to adjust dues from the industry against arrears of subsidy, according to a senior official.

Somesh Kumar, Principal Secretary, Revenue Department, speaking on the sidelines of an interactive session on e-Way Bill system organised by FTAPCCI here on Wednesday, said: “Telangana government is very keen on clearing arrears of subsidy and other incentives. Under GO: MS 64, the government will adjust tax dues from the industry against arrears of subsidy and tax incentives from the state. 

We just resolved a 15-year-long legal pending issue by extending such adjustment and this will be a win-win situation for the industry and the government.”  It may be recalled that Telangana government has allocated Rs1,300crore in the budget as against a backlog of Rs1,800 cr. This will enable the state government to clear three-fourth of the backlog this year.

Answering a question on possible revenues loss if petrol and diesel brought under GST, Kumar said: “Telangana state is not ready to forego VAT revenues on petrol and diesel, if they’re brought under GST. There should be some mutual benefit mechanism before taking a decision on imposing new indirect tax regime on petroleum products. First of all, let GST stabilise in the country, then we may take a look at other factors.”

Despite initial hiccups in switching over to GST regime, Telangana state recorded a total Rs42,076 cr revenues with 20 per cent for 2017-18 as against Rs34,235 crore in 2016-17 fiscal. Telangana state received Rs 9,176 crore revenues on petrol, diesel and other fuels under VAT and other acts in FY18. The highest revenue contributor to the state exchequer is state excise revenues as liquor sales added Rs10,543cr to the state’s kitty.

In 2017-18 fiscal, SGST revenues were Rs6,540crore, IGST Rs6,534crore and GST compensation was Rs169crore. “Telangana Chief Minister K Chandrashekhara Rao has waived several tax burdens on farmers and other sections. Such waiver was Rs800 VAT on food grains and that benefited farming community. Despite all these reduction in taxes, Telangana was able to achieve 20 per cent growth in revenues in last fiscal. Before GST, there were concerns, but Telangana government took several measures to bring total compliance for the industry,” said Kumar.

FTAPCCI President Gowra Srinivas said: “We had suggested 64 amendments to GST and other tax issues, Telangana government positively responded and ensured all these in place for the ease of doing business.”