Slowdown may affect state government's VAT collection

Although Maharashtra achieved impressive 21 per cent growth in the first half of current financial year in collection of Value Added Tax (VAT), the state government feels the second half of current fiscal is likely to be difficult one and economic slowdown may affect overall collection.

During the first half of the current financial year, Maharashtra government collected Rs. 20,435 crore by way of VAT, which is 21 per cent higher than last year during similar period. During the current fiscal, the state government has set a target of Rs 33,000 crore for VAT collection.

During financial year 2007-08, Maharashtra collected over Rs. 31,000 crore by way of VAT. However, according to Jayant Patil, minister of state for finance, the economic downturn will definitely affect overall collections but the extent of its effect will only be known after the third quarter.

Similarly, a senior official from state government VAT commissionerate said, “The figures of advance tax, central exise and customs are definitely showing downturn and perhaps the reason behind our impressive performance is the steps taken by us to stop leakages in our system.”

However to know whether measures taken to stop leakages have improved the performance, the state government will have to wait till end of December, he added.