Centre`s compensation for VAT to be below Rs 50 bn in FY06
Centre`s compensation for VAT to be below Rs 50 bn in FY06
With most states witnessing higher growth in revenues so far, pursuant to the implemenation of VAT, the centre`s compensation to states for Value Added Tax is likely to be well below the budgeted Rs 50bn, according to agency reports.
Maharashtra secured the top position in collecting Rs 80 bn from VAT in the first half of 2005-06, followed by Andhra Pradesh (Rs 54.31 bn), Karnataka (Rs 39.72 bn, Kerala (Rs 28.91 bn) and Delhi (Rs 25.29 bn).
The centre has so far received claims worth Rs 15.98 bn for VAT compensation and has paid Rs 10.27 bn to various states that witnessed lower than expected revenue collection.
Most of the states saw double digit growth in revenue after VAT implementation and the overall collection by the 23 states and union teritories were up by 14.3 per cent at Rs 334.38 bn in the first half of 2005-06 compared to Rs 292.49 bn from Sales tax in April-September last fiscal.
Only three states, Bihar, Kerala and Mahrashtra saw single digit growth in revenue mop up.
North-eastern states like Mizoram, Arunachal Pradesh, Manipur and Meghalaya saw more than 40 per cent growth in tax collection after switching over to VAT.
More: myiris.com