Himachal Pradesh achieves 97% of tax collection target

While the economic slowdown has affected the sales tax/VAT collections of Himachal Pradesh in the financial year 2008-09, the state has been able to achieve 97% of its targets for overall tax revenues. The state collected Rs 1,908 crore as tax revenue against the target of Rs 1,976 crore in 2008-09, whereas sales tax/VAT collections stood at Rs 1,246 crore compared to the targeted Rs 1,336 crore.

Total tax revenue in the state for 2007-08 was around Rs 1,674 crore. The state excise and taxation department has fixed a target of around Rs 2,300 crore for tax revenue for fiscal 2009-10.

Talking to FE, RD Dhiman excise and taxation commissioner, Himachal Pradesh, said, ?While we achieved 97% of our target, VAT collection dipped 7% last year. However VAT collections are 14% higher than the year 2007-08 when it stood at Rs 1,092.84 crore.? He added, ?Diesel consumption in the state reduced due to higher taxes compared to the neighbouring states of Punjab and Haryana. The extended monsoon led to lower inflow of tourists. A major portion of the sales tax used to be recovered from the construction of various hydel power projects; since they are nearing completion, sales of construction material have also reduced.?

The excise duty revenues soared to Rs 431 crore against the targeted Rs 428 crore in 2008-09 while the luxury tax collections were Rs 168 crore compared to the targeted of Rs 142 crore. Other taxes were around Rs 63 crore.

?We are hopeful that the economic condition will stabilise this year and we will be able to collect tax revenues of Rs 2,300 crore by the end of current fiscal. This figure includes excise duty of Rs 480 crore, sales tax/VAT of Rs 1,604 crore, passenger and goods tax of Rs 75 crore and other taxes including luxury tax of Rs 162 crore,? said Dhiman.

The state government has extended the incentive of concessional rate of central sales tax at 1% for all the industrial enterprises beyond March 31, 2009, till March 31, 2013.

But this is not likely to affect the revenue collections of the excise and taxation department as it?s an extension of the existing industrial package in the state.