Tripura comes first in getting compensation for Vat loss
In the first case of Vat compensation, the finance ministry has sanctioned Rs 4.89 crore for the Tripura government to offset the revenue loss caused by the new multi-point value-added tax during the first quarter of this fiscal.
The ministry, which has provisionally earmarked Rs 5,000 crore to nullify the adverse impact, if any, of Vat on the states’ revenue growth in the whole year, is close to sanctioning a larger claim of Rs 193.8 crore by Andhra Pradesh, according to officials.
Maharashtra, which had reportedly pitched for a compensation of about Rs 400 crore to make good the Vat-induced deceleration in revenue growth in Q1, however, has not made a formal claim yet. “We are yet to receive any full-fledged Vat claim in the prescribed format other than from AP and Tripura,” said a senior finance ministry official.
The tax revenue of ‘Vat states’ had shown an average growth of 12% during Q1, with a higher growth of over 15% in June, when the implementation became more or less uniform and stable. This growth rate has kept pace with the historical growth rate of sales tax revenue in most sates, barring a few like Andhra and Maharashtra.
Source: financialexpress.com