Chennai, Oct 6:
Former Tamil Nadu minister and DMK leader Thangam Thennarasu has alleged that the State’s GST revenue has been declining continuously for the past three months, with a 5% fall recorded in September. He said the trend raised questions about economic activity within the State.
In a statement, Thennarasu said the total GST collected in a State broadly reflects economic activity, as it is linked to transactions involving goods and services. He said the continued decline in revenue from transactions within Tamil Nadu raised concerns about the state of domestic economic activity.
He said the decline was continuing even after the recent reduction in GST rates. According to Thennarasu, some were seeking to justify the situation on social media by highlighting a 17% increase in revenue after settlement, without addressing the underlying trend in the State’s own tax collections.
Thennarasu said the post-settlement figure included the State’s SGST collections as well as the SGST portion of IGST settled to the States. Official GST data similarly defines post-settlement GST as the cumulative GST revenue of States/UTs and the SGST portion of IGST settled to them.
He argued that focusing only on the post-settlement increase would not provide a complete picture of Tamil Nadu’s economic performance. Revenue from IGST settlements includes taxes relating to transactions involving goods sourced from outside the State and imports, he said, and therefore should not by itself be treated as a direct indicator of economic activity taking place within Tamil Nadu.
Thennarasu urged the TVK government to explain why tax collections from transactions within the State had been declining instead of focusing on overall revenue figures after settlement.
He called for the government to address the reasons behind the alleged weakening of Tamil Nadu’s domestic economic activity and provide clarity on the trend in GST collections.