GST collection, devolution a success story in North East, says Sitharaman

GUWAHATI — The North Eastern states have scripted a success story in the collection and devolution of the Goods and Services Tax (GST), Union Finance Minister Nirmala Sitharaman said here on Friday.

Assam was the first state to ratify the GST Act, four days after it was passed and since then there has been a 12 times increase in the collection of taxes, she said at the Investiture Ceremony for conferring the Presidential Award for ‘Specially Distinguished Record of Service’ to officers and staff of Central Board of Indirect Taxes and Customs (CBIC).

According to the 2023 RBI report on state finances, the eight NE states have registered a compounded annual revenue growth of 27.5 per cent due to a hike in GST collection, the Union Finance minister said.

“The GST is a symbol of what a post-independence India can do towards building a constitutional mechanism working together not only for revenue collection but also the devolution of money earned is done in a very acceptable formulation between the Centre and the states”, she said.

Assam had realised the benefits and importance of the ‘One nation-one tax’ formula which led to a manifold increase in its revenue collection, she said.

Assam’s sales tax collection before the implementation of the GST was INR 558.26 crore but this has increased manifold to INR 7,097 crore.

“GST has brought about a significant improvement in the system which has not only benefited the states but ultimately the people as well”, Sitharaman said.

GST is primarily a destination-based tax unlike the central sales tax which is origin based which has benefitted the eight states in the region along with the quantum that goes back to the states as distribution of revenue, she said.

GST has seen remarkable success in the North East. Assam, under the then Finance Minister Shri @himantabiswa, who is the current Chief Minister of the state, was also one of the first states to ratify GST.

– Smt @nsitharaman in Guwahati. (1/n) pic.twitter.com/OHMuDmtxmh

— Nirmala Sitharaman Office (@nsitharamanoffc) July 21, 2023

”There is, however, still scope to widen the tax base and the officials should focus on bringing more small and medium enterprises, traders and other businesses within the ambit of the GST”, she said.

The Union Finance minister also highlighted the capacity of the GST Information Technology infrastructure which has been consistently and steadily improved to tackle huge loads of transactions concentrated on a single day.

The North East has borders with four countries and there are 25 functional Land Customs Stations (LCS) and these include 20 along the Indo-Bangla border, three along the Bhutan and two with the Myanmar border, Sitharaman said.

Out of these, only 15 have Electronic Data Interchanges (EDI) and the officials must ensure that by December, the remaining LCSs also have the electronic facilities which will help to detect and stop smuggling.

Union Finance Minister Smt. @nsitharaman addressing the gathering at #CBICInvestiture ceremony in Guwahati.

She will confer Presidential Awards for Specially Distinguished Record of Service to officers and staff of CBIC@cgstcusgau @cbic_india pic.twitter.com/GwuG49LgSs

— PIB in Assam (@PIB_Guwahati) July 21, 2023

”This will help us to get a better picture of what is coming in or going out and lead to more transparency in our efforts to stop smuggling through the borders”, she said.

Smuggling through the North East has become ”worrisome as earlier it was mostly gold and ganja that was being smuggled but now chemical and artificial drugs are coming into the region in large numbers. The officials have been able to detect these but more needs to be done”, Sitharaman said.

”This is not a big challenge for the CBIC as in the past they have shown their exemplary performance in coping with the various changes and adaptations required for GST implementation”, she added.

She also presented awards to 29 CBIC officials from across the country for their exemplary performance.

The Union minister is currently on a two-day visit to Assam and Tripura.