State falls short of Rs 250 crore in sales tax mop-up
Maharashtra’s sales tax collection in May-July ’05 has fallen short of its earlier projections as lower rates under the value added tax (VAT) regime reduced the flow into the state’s coffers.
Sources in the state’s revenue department said that the government’s target for the three months, based on a formula accepted by the Centre, was Rs 2,701 crore. But the government managed to collect only Rs 2,451 crore — a shortfall of about Rs 250 crore.
“This was expected since the average rate of tax in VAT regime has fallen to 12.5% from the earlier 17.5%. There is nothing shocking,” a revenue department official said.
According to a formula, all states have been asked to consider the three best years for revenue collection in the past five years. The arithmetical mean of these years will be considered as a mean year based on which the tax collection will be projected for the year ’05-’06.