Haryana ranks first among the northern states and third in the country, as far as growth in value added tax (VAT) collections are concerned with neighbouring Punjab close behind.
According to the latest VAT collection figures, Haryana stands at number three with 21% growth projections in VAT for 2008-09 in the country, while Andhra Pradesh, with a high growth rate of 24%, is number one in the country. Bihar stands at number two with growth of 23% during the previous year. Punjab, which had a 14% growth in 2007-08, is targeting a growth of 20% in 2008-09.
Haryana chief minister, Bhupinder Singh Hooda told FE at his official residence here on Tuesday that, ?Haryana was the first state in the country to introduce VAT in 2003-04 and it has been achieving a double figure growth in VAT collections every year since then. The state has done so well that for the last five years, it has consistently touched the 20% growth mark every year.?
Hooda, who was honoured on Tuesday by various organisations of the state for his people-friendly decisions, told FE, ?Haryana is the number one state in the country as far as per capita income is concerned. It also ranks first in terms of per capita investment. It is fast heading towards becoming a state with the fastest growth rate of VAT collections per year?.
The Punjab government has projected a 20% growth in VAT for the year 2008-09, at Rs6,290 crore. It was with these projections in mind that while neighbouring Haryana reduced VAT on petrol and diesel when prices were hiked, the Punjab government ruled out reduction on VAT on petrol and diesel in the state. The present rates of VAT on petrol and diesel in the state are 27.5 and 8% respectively, the highest among all the northern states.
In Chandigarh, the VAT on petrol is 22%. A major portion of VAT in Punjab comes from petroleum products and last year, of the total VAT collections, VAT from petrol only accounted for Rs 1,239 crore, agriculture accounted for Rs 592 crore, liquor Rs 24 crore, automobiles Rs 497 crore and other services Rs 2,317 crore.
Finance department sources said that rampant tax evasion among traders of the state could be a cause of serious concern for the government, as it had not witnessed a buoyancy in tax collections, despite the fact that investment have started pouring into Punjab in the recent past. The poor mobilisation of resources can be gauged from the fact that the state government could collect just Rs 50 crore from change of land use charges and royalty from non-ferrous minerals, against the target of Rs 410 crore, which was fixed in budget for 2007-08. Another cause of worry is that Punjab is anticipating a growth of only 6.02% from excise levy on the auctioning of liquor vends at Rs.1,830 crore in 2008-09, compared to Rs1,726 crore in 2007-08. The growth under this parameter was 26.20% in 2007-08.