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Our Bureau

New Delhi , Aug. 17

VAT-implementing States that had generally a moderate tax structure under their earlier sales tax regime seem to have recorded higher rates of increase in revenue in the first quarter of the current fiscal, compared to the States that had relatively higher tax rates. This trend is visible from the first quarter tax revenue estimates that are now available for the 22 VAT-implementing States/UTs. An illustrative case could be the revenue trend comparison between Maharashtra (earlier high tax rates) and Delhi (earlier moderate tax rates).

Maharashtra (which had average tax rates of about 18 per cent in sales tax regime) recorded a modest 9.2 per cent growth in tax revenues post-VAT, while Delhi recorded robust growth of 24.9 per cent increase in tax revenues in the first quarter of the current fiscal.

Official sources, however, said the rate of increase or decrease in tax revenues depended on a number of factors, including tax buoyancy.

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