The Hindu Business Line : VAT regime shows signs of revival in collections in AP

After threatening to hit the collections of the Commercial Tax Department very badly, the new tax regime has started showing signs of revival in collections.

The first quarter in the post-VAT scenario recorded just a low growth of 3.4 per cent, while most of the VAT implementing States in the country registered tax collections in excess of 15 per cent. The poor record had worried the State Government.

It is believed that the uncertainty and confusion over tax rates might have led to the poor show.

Some dealers raised deliver challans (information on goods delivered to dealers or customers), making the transactions `incomplete'.

These were not reflected in the turnover figures.

The officials then found that a variety of reasons had contributed to the dip in collections.

"Things are falling place," officials in the department said.

In August, the collections recorded a growth of 12 per cent in July as against 6.2 per cent earlier.

Up to August, VAT collections stood at Rs 3,413 crore as against the target of Rs 13,156 crore for the year.

By November end, collections went up to Rs 7,490.76 crore as against Rs 6,653.33 crore in the same period last year, showing a growth rate of 12.59 per cent.

Officials said that the first major step was keeping tabs on the dealers, who thought that the initial period of VAT was a honeymoon.

"Many thought that it was honeymoon and the Department might take a lenient view. Nil returns and credit returns filed by some of the dealers resulted in a probe. We cross-checked their figures with manufacturers," they said.

"Interestingly, while manufacturers recorded high sales, some dealers tried to paint a bleak picture.

"It is possible in certain cases and areas. But it is not possible in all the cases," the sources out.

"We have sent a message that the department won't buy stories. The initial period was neither a honeymoon nor a moratorium for committing mistakes. We did allow honest mistakes but not the deliberate attempts to dodge the tax," he said.

Good rains that boosted the State's economy also contributed to increased collections. Besides, the department also took measures to fine-tune the mechanism.

The officials felt that the trend should continue in the coming months.

This, however, is part of the story. The increase in collections cannot solely be attributed to the said measures.

It is also because of increased inflows from the petroleum (all petro products) and liquor heads.

These two contributed nearly 42 per cent of the total collections.

While collections from petro products yielded Rs 2,616 crore (Rs 2,135 crore), liquor chipped in Rs 1,193 crore (Rs 1,078 crore).

Without these , growth in all other heads was 7.05 per cent.