The Hindu Business Line : Maharashtra tops list of 7 States in VAT collections

Hyderabad, Oct. 25 Maharashtra tops the list in VAT (value added tax) collections in seven States in the South, Western and Central regions with Rs 14,144.42 crore in the first half of the current financial year as against Rs 12,919.71 crore, showing a growth of 9.48 per cent.

Andhra Pradesh, which ranks third in the list after Tamil Nadu, recorded the highest growth of 21.3 per cent by registering collections to the tune of Rs 9,159.62 crore during the period as against Rs 7,551.39 crore in the corresponding period last year.

“The increase was Rs 1,608.23 crore or 21.30 per cent,” Mr Konathala Ramakrishna, Andhra Pradesh Minister for Commercial Taxes, told Business Line.

Budget target

The State, however, fell short of the budget target by about five percentage points.

Interestingly, the first half figure for the current fiscal equalled the full year collections of Rs 9,649.27 crore in 2003-04. Andhra Pradesh was among the first States to implement the VAT regime in June 2003, which incidentally marked the advent of Congress Government.

Tamil Nadu, a late entrant to the VAT regime, posted the lowest growth rate among the seven States at just 1.56 per cent. It grew from Rs 9,582.72 crore to Rs 9,734.15 crore.

Collections in the other four States (with growth rate in brackets) are: Karnataka - Rs 6,405.19 crore (15.12 p.c.); Kerala – Rs 4,264.49 crore (9.33 p.c.); Gujarat - Rs 7,296 crore (18.05 p.c.); and Madhya Pradesh – Rs 2,738.41 crore (11.92 p.c.)

Issues

Though VAT collections were up significantly for most States, the thing that bothered them most was lesser growth in petroleum segment.

“It is a surprise for us. We even checked with some other States. They are also witnessing a similar trend,” Mr Ramakrishna said.

Increase in usage of public transport could be one reason. “Also, we have reduced rate of tax by one per cent. Cumulative effect of this resulted in a loss of about Rs 500 crore,” he said.

Reduction of CST to three per cent from four per cent (as part of the phasing out plan) too had contributed to the lesser collections. It is estimated that Andhra Pradesh alone lost about Rs 400 crore on this count.

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