About one-third of state revenue, chiefly from alcohol and petroleum, falls outside GST, challenging the ‘one nation, one tax’ vision.
The Goods and Services Tax (GST) implementation is progressing, yet recent analysis indicates that approximately one-third of state government revenue might remain excluded from this new taxation system. Key sectors such as petroleum products, real estate, and alcoholic beverages collectively account for around 37% of the total tax revenue for most states.
Excluding these significant sectors from GST contradicts the principle of ‘one nation, one tax’ and undermines the tax regime’s objective to curb illicit trade. For instance, projections for the current fiscal year estimate alcohol sales alone to generate about INR 83,300 crores in revenue, with Karnataka and Kerala being among the leading contributors.
This information was detailed in a report by the Economic Times.
