The Goods and Services Tax is set to become a big challenge for the otherwise “financially prudent” Gujarat once the 14 per cent compensation commitment of the centre winds up, 15th Finance Commission Chairman NK Singh said on Monday.
“One of the big challenges Gujarat is facing is GST collections. Once the 14 per cent guarantee as GST compensation by the union government winds up, Gujarat will need to look at the GST collection projections seriously and tax buoyancy may become an issue,” Mr Singh, who is heading a team of the commission on a visit to Gujarat, told reporters in Ahmedabad.
Gujarat is the sixth state the Finance Commission is visiting.
Mr Singh said the Finance Commission is impressed with Gujarat’s performance in reducing and keeping in check the debt to GDP ratio “tantalisingly close to 20 per cent-mark”, as stipulated by the new Fiscal Responsibility and Budget Management Act (FRBM) Act.
This target, otherwise, is to be achieved nationally by 2023-24, he…