News:According to India Ratings and Research, due to lockdown 21 major States will suffer a collective revenue loss of about ₹ 97,100 crore for the month of April alone.
Facts:
States Sources of Income:The States revenue mainly comes from following heads:
- State Goods and Services Tax(SGST): It is a destination based tax on consumption of goods and services.It has come into force since 1st July 2017.
- Share in Central Taxes: Article 280 of the Indian Constitution requires the composition of the Finance Commission in every five years so that the states can get a reasonable part in the tax revenue of the union government.
- State VAT on petroleum products: Value added tax(VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain from production to the point of sale.Although, GST has replaced VAT on most goods, some goods such as petroleum are still not covered under GST.
- State excise duty on liquor: Excise Duty is levied on goods manufactured in India and are meant for domestic consumption.Many of the excise duties have been subsumed under GST.However, few items such as liquor are kept out.
- Stamp Duty: It is a state levy paid to register a document, typically an agreement or transaction paper between two or more parties with the registrar.It is not uniform across states and varies for different types of documents.
- Motor Vehicle tax, Tax and duty on electricity and
- Non-Tax revenue: It is the recurring income earned by the government from sources other than taxes.It becomes payable only when services offered by the government are availed of such as police services, electricity, municipal services among others.
