Ongoing slowdown has started affecting tax collections in Haryana as value added tax (VAT) collections fell to 15% as against about 21% growth witnessed by the state during the first six months of 2008-09.
In the first six months of 2008-09, Haryana collected VAT of Rs 4,300 crore up 21 % from previous year. However, October showed only 15% growth in VAT collections. The major reason is believed to be the banks tightening screws on extending loans for the purchase of vehicles and other loans. The direct tax collection is also likely to be affected due to slowdown.
Significantly, Haryana had proved to be a money spinner for the Centre as it had made maximum direct tax collections of Rs 5,215 crore in 2007-08 as against combine collection of Rs 4,528 crore by Punjab, Himachal Pradesh, Jammu and Kashmir and Union Territory of Chandigarh. The state had shown a growth of 65% in direct tax collections in 2007-08 as against 18% growth shown by Punjab, Jammu and Kashmir, Himachal and Chandigarh. For record the national growth was 38%. The growth in Haryana?s direct tax collection has been mainly due to increase in corporate tax collection by 87% at Rs 2,532 crore.
?Considering the world recession, a new challenge was ahead before the officers of the department and they had to work with the same zeal and dedication to meet the challenges to generate more funds to maintain accelerated pace of development of the state? observed state excise and taxation minister, Birender Singh told FE.
?Haryana government is working on a new innovative incentive scheme for the recovery of arrears of tax defaulters under which 5% of the total recovered money from defaulters would be given to the informer? Singh said. He had also reviewed tax collection by the excise and taxation department and called a meeting of the deputy excise and taxation commissioners .
The cause of worry for the state government could be the fact that Haryana had earmarked a tax collection target of Rs 11,840 crore during the current financial year. However, only Rs 6,139 crore had so far been collected, which was just 51.86 %of the targeted total tax collection. The target of tax collection for 2008-09 had been fixed at Rs 2,000 crore more than the last year as the state had maintained a cumulative growth rate of more 20 %plus during the last five years after introduction of VAT in the state. Singh even hinted at identifying new thrust areas on which tax could be levied like extending the scope of luxury tax.