Though the gross tax amount will remain the same, the new decision will affect the liquidity of the state treasury. Thiruvananthapuram: A new decision from the ministry of finance may further drive the cash-strapped state government up the wall. According to latest reports, the share from the central tax pool will be delivered to the state only once in three months.
According to the directives from the 14th finance commission, the state is entitled to receive six different types of taxes from the central pool.
The decision comes as a blow even as the state is slowly restructuring its finances to adapt to the Goods and Services Taxes (GST) implemented in June last year.
The Rs 1,400 crore that the state was entitled to was delivered on the first day of every month before GST. After the new tax regime was brought into place, the amount was delivered only on the 15 of the month.
The new decision will affect the delivery of the tax share collected under the heads of income tax, corporation tax and excise revenue. These taxes, forming a significant share of the tax pool, will now be delivered only once in three months, thereby causing a shortfall of around Rs 500-600 crore every month.
Though the gross tax amount will remain the same, the new decision will affect the liquidity of the state treasury.
The new decision will also add to the existing cash crunch caused by the bimonthly delivery of the monetary compensation effected to make up for the loss caused by the implementation of GST.
