Bhubaneswar: The Odisha government has incurred a loss of an estimated Rs 525 crore in two months after the implementation of the Goods and Services Tax (GST) system from July 1, state Finance Minister Sashi Bhusan Behera said on Monday.
"Considering the 14 per cent growth in commercial tax collection in the last financial year, we were expecting to collect Rs 2,393 crore in July and August. However, we have collected Rs 1,868 crore in these two months, which is Rs 525 crore less than the target," Behera told media persons here.
He said the state government would demand the Centre to compensate the loss.
The Minister said the GST on handicraft and handloom products has been slashed by the GST Council to 12 per cent from the existing 18 per cent.
He said Chief Minister Naveen Patnaik, in a letter to Prime Minister Narendra Modi, had sought full tax exemption on handicraft and handloom products.
"Considering the demands of Odisha, the GST Council reduced the tax rate on other handicraft goods from 18 per cent to 12 per cent," said Behera.
The Minister said the GST Council has also exempted clay idols from tax, which was 28 per cent earlier.
The tax on 'sabai grass' weaving ropes and 'sal' leaf plates and cups was slashed to 5 per cent from 18 per cent while tax on clay sculpture was fully withdrawn, Behera said.
The tax on stone sculptures was slashed to 12 per cent from 28 per cent while tax on khadi clothes and fabrics sold by organisations certified by the Khadi and Village Industries Commission has been slashed, he added.