Punjab, Haryana, Chandigarh post dismal VAT revenue growth

Press Trust of India Posted online: Thursday, Oct 03, 2013 at 0000 hrs
Chandigarh : Tax revenue collections in Punjab, Haryana and Union Territory Chandigarh have shown "dismal"growth in mobilisation of Value Added Tax during the April- August period, state officials have said.

Though both states and Union Territory are hoping increased realisations in coming months, yet they may find it tough to achieve tax revenue targets for current fiscal if economic conditions did not improve, official sources said.

Punjab, Haryana and Chandigarh have reported growth in VAT mobilisations at 10 per cent, 6.13 per cent and 2 per cent, respectively for April and August period of current fiscal primarily on account of slowdown causing less tax realisations from potential sectors including automobile.

Punjab and Haryana have projected a growth of 19 per cent and 17.26 per cent in VAT growth with mobilisations at Rs 17,760 crore and Rs 19,288 crore, respectively, for this fiscal.

"Economic slowdown has hit our growth in tax collections particularly in automobile and auto parts segment," Punjab Excise and Taxation Commissioner Anurag Verma told PTI here, adding that revenue from automobile segment degrew by 10-15 per cent till August.

Echoing similar views, Haryana Excise and Taxation Commissioner Anil Malik said the slowdown has impacted state's automobiles and ancillary sector, causing less mobilisation of tax revenue.

Significantly, Haryana is a major hub of both automobiles while Punjab is also a leading manufacturer of auto components.

"Because of lower sales of cars in the city, the collections have been affected. Our VAT growth has been 2 per cent as compared to 15 per cent in corresponding period of last fiscal," an official of Chandigarh Excise and Taxation department said.

Country's economic growth for April and June quarter stood at 4.4 per cent, which was slowest in last 4 years. Apart from this, lower arrival of wheat during last rabi marketing season has also hit the collections in the shape of VAT from wheat this fiscal.

While Haryana's VAT collections from wheat went down by Rs 200 crore, Punjab also saw drop of Rs 80 crore in tax realisations from wheat.

Against the target of procuring 140 lakh tonnes (LT) for central pool for last Rabi marketing season, the actual purchase from Punjab remained 109 LT.

In Haryana, wheat arrivals were 59 LT against the target of 86 LT.

"Punjab is an agrarian economy therefore any downfall in foodgrain arrivals will certainly hit tax collections," said Verma.

Both agrarian states levy VAT on wheat, officials said. VAT is a major source of state's income as it constitutes 60 per cent of Punjab and Haryana's total tax revenue.