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N. Ramakrishnan

CHENNAI, July 26

THANKS to a general buoyancy in tax collections, the Tamil Nadu Commercial Taxes Department has ended the first quarter of 2002-03 with a collection of about Rs 2,350 crore, a little over nine per cent more than the Rs 2,150 crore collected in the same period last year.

Official sources, however, do not want to hazard a guess as to whether the growth in tax collections will continue for the rest of the year. But, they point out that with a number of taxation measures coming into effect from July 1, there is every possibility that tax collections will witness a 10 per cent growth for the remaining part of the year.

If the total revenue collections through sales tax and other related acts in April and May, for which the break-up figures are available, are any indication, collections under the Tamil Nadu General Sales Tax Act (TNGST) and entry tax have been good.

For these two months, the revenue mopped up under the TNGST is Rs 1,278.26 crore, an almost six per cent growth over the Rs 1,206 crore collected for the same two months in the previous year.

However, the real growth is in entry tax where the collection was Rs 39.74 crore in April 2002 against Rs 23.51 crore in April 2001, and Rs 47.79 crore in May 2002 against Rs 18.56 crore in May 2001. In April and May 2002, the total entry tax collection was Rs 87.53 crore — a 108.8 per cent jump over the Rs 42.07 crore collected in April and May of the previous year.

The noticeable increase in entry tax collection is mainly because of the Government's move in the Budget for 2002-03 to bring in a number of commodities, hitherto not levied an entry tax, under the ambit of entry tax.

A number of other taxation measures including the one per cent resale tax and the five per cent infrastructure surcharge come into effect from July 1. Therefore, the officials are confident that revenue from these sources will increase in the coming months. The Government expects Rs 250-300 crore in a full year through the infrastructure surcharge and Rs 70-80 crore through the resale tax.

The removal of exemptions on edible oil, pulses and grams is also expected to help increase sales tax collections during the year.

Besides, from July 1, the tax structure on gold jewellery has also been changed. The earlier sales tax of four per cent has been reduced to two per cent. But, at the same time the Government has introduced a one per cent luxury tax on stocks of jewellery.

The one per cent tax on jewellery tax is mainly intended to plug sales tax evasion. A number of jewellers, according to the sources, sell jewellery without billing the sale. This is sought to be plugged by the tax on stocks.

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