The State Goods and Services Tax (SGST) is the largest contributor to Meghalaya’s own tax revenue. It is also the main source of State’s own revenues.
According to the State Finance Audit Report (Report No. 1 of 2023) prepared by the Comptroller and Auditor General (CAG), Meghalaya’s own tax revenue increased by Rs 850.28 crore from Rs 1,450.10 crore in 2017-18 to Rs 2,300.38 crore in 2021-22 at a compound annual growth rate (CAGR) of 12.23 per cent.
The major contributor to the State’s own tax revenue was SGST which increased from Rs 376 crore in 2017-18 to Rs 1,117.94 crore in 2021-22.
Other main contributors to the State’s own tax revenue were State Excise (Rs 199.30 crore to Rs 308.00 crore) and Taxes on vehicles (Rs 67.01 crore to Rs 99.42 crore).
The State also collected a fair share of Tax Revenue from Stamp duty and Registration fees (Rs 20.25 crore to Rs 27.06 crore), Land Revenue (Rs 2.08 crore to Rs 9.83 crore) and Taxes on goods and passengers (Rs 7.83 crore to Rs 12.54 crore).
During 2021-22, the State’s own tax revenue comprised 16.12 per cent of total revenue receipts, of which SGST at Rs 1,117.94 crore contributed to 48.60 per cent of Total Tax Revenue. The next highest source of tax revenue was Taxes on Sales, Trade, etc., (31.25 per cent) and State Excise (13.39 per cent).
The increase in own tax revenue over the previous year was mainly due to an increase in collection of taxes under SGST by Rs 295.13 crore (35.87 per cent) and Taxes on vehicles by Rs 20.80 crore (26.46 per cent).
On the other hand, tax collection reduced under State Excise by Rs 67.38 crore (17.95 per cent), Land Revenue by Rs 11.46 crore (53.83 per cent), Stamp Duty and Registration Fees by Rs 4.50 crore (14.26 per cent), other taxes by Rs 0.39 crore (5.50 per cent) and Taxes on Sales, Trades, etc by Rs 6.20 crore (0.86 per cent).
Twelve years after the implementation of Value Added Tax (VAT) in 2005, the Union Government rolled out Goods and Services Tax (GST) on July 1, 2017. The Meghalaya Goods and Services Tax Act, 2017 was passed by the State Assembly on June 15, 2017 and made effective from July 1, 2017.
In the five years during which the GST Act has been in effect, the revenue collected by the Government of Meghalaya through SGST has risen by Rs 741.94 crore from Rs 376.00 crore in 2017-18 to Rs 1,117.94 crore in 2021-22. The collections during 2021‑22 included Advance Apportionment of IGST amounting to Rs 46.61 crore.
According to GST (Compensation to the States) Act 2017, the Central government will compensate the states for loss of revenue arising on account of implementation of GST for a period of five years. The compensation to be paid is calculated by taking into account the projected revenue with 2015-16 as the base year.
In the case of Meghalaya, the revenue during the base year 2015‑16 was Rs 636.17 crore. The projected revenue of the State for the year 2021-22 works out to Rs 1,396.38 crore.
Meghalaya had 30,599 registered dealers under the Meghalaya Value Added Tax (MVAT) Act as on June 30, 2017. The Taxation Department, during the period from July 1, 2017 to March 31, 2021, registered 30,108 dealers under GST, of which registration of 1,576 dealers under GST were cancelled.
Thus, as on March 31, 2021 there were 28,532 registered dealers under GST with the State Taxation Department, out of which 8,586 GST registrations pertained to dealers who had migrated from MVAT to GST and 19,946 GST registrations were new additions.
During 2021-22, the Taxation Department registered 1,940 new dealers while the registrations of 478 migrated dealers were cancelled. Thus, as on March 31, 2022, there were 29,994 registered dealers under GST with the State Taxation Department, out of which 8,108 GST registrations pertained to dealers who had migrated from MVAT to GST and 21,886 GST registrations were new additions.
