The Hindu Business Line : Tax revenues of VAT States up 14.6% in April-Oct

THE tax revenues of the 24 States and Union Territories that have implemented VAT recorded 14.6 per cent increase during the first seven months of the current fiscal against the year-ago period.

Data compiled by the Finance Ministry showed that the tax revenues of the 24 States and Union Territories stood at Rs 41,800 crore during April-October 2005 against sales tax revenues of Rs 36,480 crore recorded in the same period of the previous year.

Non-manufacturing intensive States such as Orissa and Delhi recorded strong growth in tax revenues under the VAT regime.

In the first seven months of the current fiscal, Orissa's tax revenues increased by 27.2 per cent to Rs 1,222 crore (Rs 960 crore) and that of Delhi by 35.03 per cent to Rs 3,103 crore (Rs 2,298 crore).

Although manufacturing-intensive States like Maharashtra, Karnataka, and Andhra Pradesh have recorded strong growth in absolute terms, their performance pales when compared to the non-manufacturing States.

One reason for this could be the fact that manufacturing-intensive States are required to give input-tax credit compared to the States that are mainly populated with traders and with less manufacturing activity.

The second factor behind the strong revenue growth in the non-manufacturing intensive States is the fact that the entire margins as well as more traders have come under the ambit of the State-level VAT.

Maharashtra, which is a large manufacturing State and accounts for nearly 20 per cent of the sales tax revenues of the country, has recorded 9.7 per cent increase in tax revenues to Rs 9,934 crore (Rs 9,056 crore).

In the first seven months of the current fiscal, tax revenues of Andhra Pradesh grew by 12.36 per cent to Rs 6,480 crore (Rs 5,767 crore).