There is a good news for the fund-starved Punjab government which is reeling under the burden of subsidies running into about Rs 4,000 crore and debt burden of about Rs 52,000 crore. Consecutively for the second month, the state has witnessed unprecedented buoyancy in collections of value added taxes (Vat).

Punjab finance minister Manpreet Singh Badal told FE that the state was targeting at least 15% growth in Vat in 2007-08 as compared to 2006-07, thanks to marked improvement in collections from food grains, liquor, petroleum, automobiles and other services. He said, “The Punjab government was hopeful that this momentum would continue and next fiscal would see a total turnaround in collection of Vat and would emerge as a frontrunner in collection of tax.”

Punjab excise and taxation commissioner A Venu Prasad when contacted, told FE on Tuesday, “In January 2008, the total collections from Vat was Rs 602.23 crore. This is against Rs 484. 65 crore collected from Vat during January 2007. It marks about 24.03% increase.” He said the Punjab government was expecting a total Vat collection of around Rs 5,900 crore in 2007-08, which would be a net increase of about 15% over previous year.

Significantly, Vat collections in December, 2007 had shown an increase of about 47% over December, 2006. In December, 2007, the total Vat collection was Rs 483.13 crore as against Rs 328.35 crore collected in December last year.

Total Vat collection in Punjab till January 2008 were Rs 4,966 crore, including Central Sales Tax (CST) of Rs 294 crore. Giving sector wise details, Venu Prasad informed that Vat collection from agriculture accounted for Rs 592 crore, petrol Rs 1,239 crore, liquor Rs 24 crore, automobiles Rs 497 crore and other services Rs 2,317 crore. Total CST collected from April 2007 to January 2008 was Rs 294 crore.

Sources in excise and taxation department told FE that the department was short of about 167 inspectors of which 100 inspectors were needed to service Vat itself. Sources said this was certainly affecting the working of the department which could have done still better in plugging evasion of taxes and for better tax compliance. The department at present has 300 inspectors out of which 100 inspectors are deputed for excise duty collection, another 100 for Vat collection and remaining for other services.