Punjab, Haryana VAT kitty swells despite slowdown

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Chandigarh: Despite the general economic slowdown, both Punjab and Haryana have registered increase in value added tax (VAT) collection in the first two months of the fiscal 2009-10. Punjab finance minister, Manpreet Singh Badal told FE, “The increase in VAT collection in the month of May and June, 2009 over same period the previous year was over 20%.”

He said that the VAT collection was close to 40% in some months of 2008-09. “We are hopeful that the growth trend in VAT collections would continue through 2009-10 in Punjab,” said Badal.

For his part, finance minister, Haryana, Birender Singh told FE, “Haryana showed a growth of Rs 250 crore in VAT collections in the month of May 2009 alone and the state is set to emerge the frontrunner in VAT collections in 2009-10.” The Haryana minister claimed that at present, Haryana stands at number three with 21% growth in VAT for 2008-09 in the country while Andhra Pradesh with a high growth rate of 24% is number one state and Bihar stands at number two with 23% growth in VAT. However, enquiries from the excise and taxation department, Haryana showed that state’s collection of VAT actually declined by about 9% in April 2009, compared to April last year. Registering negative growth for the second month in a row, the collection of VAT for April remained at a low of Rs 574 crore. In the corresponding period last year, the VAT collection was Rs 631 crore. The minister claimed that there was a turnaround in May 2009 when Rs 250 crore more was collected.

The excise and taxation department sources said that despite decline in VAT collections in April this year, the state was targeting to collect Rs 9,825 crore by the end of the fiscal year 2009-10. The record wheat production in 2008-09 had proved a saviour for tax mobilisation and the state is hoping it would be able to achieve the target this year. The state is targeting VAT collection of about Rs 300 crore from wheat in 2009-10.

Enquiries from excise and taxation department, Punjab, revealed that Punjab witnessed a 20.46% increase in VAT collections in 2008-09 over 2007-08. The state’s VAT collections in 2008-09 were Rs 6,773.76 crore against Rs 5,543.49 crore in the last fiscal.