Compensation for Vat to be less than Rs 5k cr
Compensation for Vat to be less than Rs 5k cr
The Centre’s compensation to states for value added tax (Vat) implementation this year could be well below the budgeted Rs 5,000 crore, as most of the states have witnessed higher growth in revenues so far.
Maharashtra topped the list collecting Rs 8,364 crore from Vat in the first half of 2005-06, followed by Andhra Pradesh (Rs 5,431 crore), Karnataka (Rs 3,972 crore), Kerala (Rs 2,891 crore) and Delhi (Rs 2,529 crore).
Three other states — West Bengal, Punjab and Haryana — collected between Rs 2,300-Rs2,000 crore. “Going by the trend, we expect the compensation on account of Vat to be much less than Rs 5,000 crore this fiscal,” said a finance ministry official. The Centre has so far received claims worth Rs 1,598 crore for Vat compensation and has paid Rs 1,027 crore to various states that witnessed lower-than-expected revenue collection.
Most of the states saw double digit growth in revenue after Vat implementation. Overall collection by the 23 states and Union territories was up 14.3% at Rs 33,438 crore in the first half of 2005-06 compared to Rs 29,249 crore from sales tax in April-September last fiscal. Only three states — Bihar, Kerala and Mahrashtra — saw single digit growth in revenue. Mizoram witnessed the highest increase in tax collection at 213% as its kitty went up to Rs 21.58 crore from mere Rs 6.89 crore in the year ago period.
More: financialexpress.com