Kerala Government to borrow Rs 6000 crore for Onam
Thiruvananthapuram: The Finance Department has decided to borrow Rs 6000 crore from the Union Government ahead of Onam. The government is taking this step to slump in tax collection post-GST implementation.
Finance Minister Thomas Issac said that the government will be borrowing the money from the open market. The loan will be taken through debentures having a maturity of 10 years and issued by the RBI. The interest rate is from 8 to 9 per cent.
The state needs a total amount of Rs 8000 crore to give salary, pension, festival allowance and welfare pensions during Onam. In addition to the Rs 6000 crore loan, the government will obtain the remaining amount through taxes on liquor and petroleum products and registration payments.
GST came into force on July 1 and it completed one month on Monday. The officials are facing uncertainty in tax allocation in the initial phase. The traders have to file their tax returns of July within September 10. Tax returns of August should be filed from September 20 to 25. So tax allocation in the state will get delayed.
To resolve this uncertainty, the officials have directed the tax payers to file their temporary tax returns within August 20.
The state government only received the tax payments of liquor and petroleum products and payments from registrations.
An amount of Rs 1500 crore was received under VAT of various products. Minister Thomas Issac has said that delay in the payments under GST is part of the initial phase of GST implementation.