Excise revenue may go up 11% on tax hike

In June this year, the govt in the Budget for 2014-15 had proposed to hike sales tax on foreign-made liquor to 25%, from 20% charged earlier

The recent proposal of the state government to hike sales taxes on foreign-made liquor is expected to push total excise revenue collection by 11 per cent or Rs 203 crore in the current fiscal to Rs 1,983.75 crore, as per budgetary estimates.

In June this year, the government in the Budget for 2014-15 had proposed to hike sales tax on foreign-made liquor to 25 per cent, from 20 per cent charged earlier.

Last year, the state collected Rs 1,780.30 crore as excise revenue based on old rate, which was higher than the previous year collection of Rs 1,500 crore but lesser than Rs 1,900 crore target fixed for 2013-14, as per latest figures released by the excise department.

Excise revenue constitutes more than 10 per cent of total tax collection base of more than Rs 16,000 crore. In the budgetary announcement, tax rate on other form of liquor were kept unchanged.

The state government has been toying with several proposals to boost its tax revenue base since last year as income from non-tax source has been on a slippery mode.

During last fiscal, Odisha's tax and non-tax revenue totalled to Rs 25,093.87 crore, recording a modest growth of 8.57 per cent over the previous year as collection from segments like mining royalty and motor vehicle tax decelerated in the period. In case of total tax collection, collection in 2013-14 was Rs 16,891.73 crore, against the budgetary estimate of Rs 17,605 crore. The state's own tax revenue, however, logged 12.36 per cent growth over Rs 15,034.20 crore in 2012-13.

Last year, the commercial tax wing of the state finance department had proposed a host of proposals such as enhancing sales taxes on liquor and retail petroleum products to boost the dwindling revenue earnings. The department had justified its proposal for raising taxes in liquor, citing higher tax rates in neighbouring states.