Commercial tax collection up 16% on VAT growth

Commercial tax collection in the state has grown 15.69 per cent in the April-June period of 2012-13 at Rs 2,047.61 crore as against Rs 1,769.92 crore received in the comparable period of previous fiscal.

Collection grew mainly on the back of value added tax (VAT) that rose 18.52 per cent in the stated period. VAT, the single biggest contributor to the commercial tax kitty, shot up from Rs 1,344.11 crore to Rs 1,592.98 crore.

VAT collection grew as the state government had enhanced floor rate from four per cent to five per cent with effect from April 1 this year. The hike in base VAT rate was expected to generate incremental revenue of Rs 400 crore annually for the state government.

In June alone, VAT collection stood at Rs 718.91 crore, registering spike of 20.29 per cent over Rs 597.66 crore posted in the same month of 2011.

Central sales tax (CST) and entry tax, however, clocked modest single digit growth of 6.45 per cent and 6.04 per cent respectively in the April-June quarter. While Central sales tax rose from Rs 144.41 crore to Rs 153.73 crore, entry tax increased moderately from Rs 256.64 crore to Rs 272.15 crore.

“The decelerating trend seen in CST and entry tax collection is due to slowing industrial activity. Though a lot many industrial projects are on the pipeline, they have not progressed at the desired pace to boost tax collections,” said a senior finance department official.

Professional tax collection clocked 10.66 per cent growth in the stated period to reach Rs 26.68 crore compared to Rs 24.11 crore logged in the corresponding period of last fiscal.

Commercial tax collection target has been set at Rs 12,583.25 crore for 2012-13.