Odisha VAT collection grows 11% to Rs 11,023 cr in 2014-15

The collections suffered in the last fiscal due to Supreme Court order in May 2014, which asked the state govt to shut down more than two dozen iron ore mines

Odisha Value Added Tax (OVAT) collection growth slowed down to 10.9 per cent in 2014-15, deviating from average annual trend of 15 per cent growth seen in the last couple of financial years, because of dull mining and manufacturing activities, official sources said.

Total VAT collection in the year ending March 2015 stood at Rs 11,023 crore, up from Rs 9,939 crore of the previous comparable period, according to provisional data compiled by the commercial tax department. However, it was lower than Rs 12,190 crore target fixed for the year.

The collections suffered in the last fiscal due to Supreme Court order in May 2014, which asked the state government to shut down more than two dozen iron ore mines. As a result, iron ore output in the state slumped by 40 per cent to 47 million tonne.

In the mineral sector, the state imposes VAT on sale of iron ore, sponge iron and finished steel products. Besides, it gets motor vehicle tax from commercial transporting vehicles engaged in the mining sector and collects taxes on sale of petrol and diesel used by these vehicles. Even as the state government has raised VAT on petroleum products to 23 per cent from 20 per cent to boost collection, the reduction in fuel prices neutralised the incremental effect.

Between April 2014 and January 2015, the VAT collection was at Rs 5,534.18 crore. The collections improved in the last two months as government had asked its officials to maximise revenue by taking steps to recover pending dues, sources in the tax department said.

In October, the government had taken a series of measure to arrest fall in revenue collection trends witnessed in the first two quarters of 2014-15 fiscal. One of the measures included collecting Rs 200 crore VAT from National Aluminium Company (Nalco).

Apart from collecting pending dues, settlement of court cases related to dues, revision and scrutiny of tax and rise in sales tax on liquor also contributed to the growth, said the official sources. In entry tax segment, the collection was Rs 1,723 crore, up by 6.7 per cent compared to 2013-14.

Total commercial tax collection, which includes OVAT, central sales tax, state entry tax, professional tax and Odisha entertainment tax rose to Rs 13,828 crore in the last fiscal, up by 10.14 per cent from 2013-14. Still, it was 8 per cent lower than Rs 15,040 crore collections estimated by the department.