UP getting e-savvy in tax collection, administration

The adage ‘perception is harder than reality’ would rightly apply to Uttar Pradesh, which remains a favourite punching bag for the elite and industry alike for its slow pace of industrialisation and administrative reforms.

However, UP is on course to becoming one of the most e-savvy states in terms of tax collection and administration.

The facility of commercial tax e-payment, which was launched last year, has met with great success and almost 20 per cent of the Rs 20,668 crore tax revenue for 2009-10 was realised online.

UP has tied up with several public sector banks, including the State Bank of India, Punjab National Bank and Bank of Baroda for e-payment. The government is in talks with around 8 public and private sector banks to offer similar services for the benefit of traders.

 

Besides, the government has decided to dump the stamp papers for registration of property and sales deed. Soon, franking machine and e-payment at designated counters, such as banks, would be introduced to replace stamp papers.

UP would be only ther fourth state to implement this advanced system after Delhi, Haryana and Andhra Pradesh.

The new system will be introduced by the end of calendar 2010 after the law department drafts detailed rules and regulations.

Initially, the stamp paper system would run concurrently with the new introductions, however, depending upon the success of the latter, stamp papers would be phased out, principal secretary (tax and registration) Desh Deepak Verma said.

Recently, the UP Stamp and Registration (Amendment) Act, 2009 was approved by the President paving the way for the implementation of this system, which was hanging fire for the last several years.

Franking and e-payment systems would check stamp paper scams and forgeries, which cause monetary loss to the exchequer. It will also be convenient for the people.

During 2009-10, UP commercial tax realisation stood at Rs 20,668 crore compared to Rs 17,404 crore in 2008-09 – a growth of around 18 per cent.

UP had introduced Value Added Tax (VAT) in January 2008 and since its implementation, tax collection has improved as it effectively checked tax evasion.

The stamp and registration department collected revenue of Rs 5,100 crore during the last financial year compared with Rs 4,652 crore in 2008-09.

Meanwhile, entertainment tax revenue improved from Rs 141 crore in 2008-09 to Rs 193 crore last year, a jump of 37 per cent.

“At present, the multiplexes are enjoying tax holiday in UP and once they come under the tax umbrella, the collections will surge considerably,” he added. Verma reiterated the commercial tax collection in UP had the potential to double to Rs 40,000 crore annually under GST, likely to be introduced from April 1, 2011. “Since, UP is a consumer state, it stands to gain under the proposed uniform tax regime,” he noted.