Odisha monthly commercial tax collection sinks 10% in Nov

Commercial tax collection of the state government, which comprised of sales tax, entry tax, luxury tax, entertainment tax and professional taxes, dipped by 10 per cent in November to Rs 862.47 crore, from Rs 958.34 crore in October, this year.

Poor growth in sales taxes dragged the revenues, sources in finance department said.

During the month, Value Added Tax (VAT) collection was Rs 687.63 crore, showing just 0.8 per cent increase from the same month last year.

Collection of central sales tax (CST), which primarily comprised of inter-state sale of goods, witnessed negative growth in April-November. During the eight month period, central tax collection was at Rs 422.83 crore, a fall of 4.5 per cent from the previous comparable period.

"CST revenue has been continuously declining for past several months due to curbs on inter-state movement of iron ore," official sources said.

Inter-state sale of iron ore has suffered due to curb on road transportation of the mineral and a government order to reserve at least half of the monthly output for local industries. Even for chrome ore, the state government has a policy that 70 per cent should be reserved for local manufacturers in its e-auction process started last year.

Overall commercial tax revenue in April-November period, however, rose by 12.5 per cent to Rs 7,025.60 crore. The collection was Rs 6,163.10 crore till October.

The rise in collection was visible from 13.13 per cent rise in VAT at Rs 5,585.30 crore and 18.38 per cent hike in entry tax at Rs 925.17 crore in the eight month long period. The growth rate is, however, lower than April-October period, when the rates were 15.09 per cent (VAT) and 21.02 per cent (Entry tax) respectively.

Tax resources of the state government has been on sluggish mode since the second quarter of this year as its main activity mining suffered because of several curb orders slapped by the government. The biggest drop in revenue is also seen in levy collection on land and vehicle registrations.

Tax collection on vehicles was around Rs 350 crore, much lower than Rs 650 crore achieved in 2009-10. Similarly, land revenue has declined from Rs 350 crore in 2009-10 to little over Rs 200 crore in recent years. The mining boom, major industrial activity in the state, prevailed during 2008-09 and 2009-10 financial years till a state government crackdown halted illegal and irregular mining activities.

As tax resources has been on a slippery path, the state government is considering to hike taxes on liquor and petroleum products to boost its revenue collection. For 2013-14, total revenue collection target (tax and non-tax) has been pegged at Rs 26,500 crore out of which, commercial tax revenue has been targeted at Rs 13,176.09 crore.