 "Slowdown in real estate sector hits TN's revenue")
Slowdown in the real estate sector has impacted Tamil Nadu's revenue from registration and stamp duty, said the State Finance Minister O Panneerselvam. On the other side, tax income from the sale of alcohol has gave a helping hand. The State Government also said that it decided to have conservative projection on commercial tax collection in 2014-15.
In his budget speech today, he said that, the real estate sector has been registering low growth for the past two years, which resulted in reduction in number of registrations of property transaction .
“To assess the slow down in real estate sector, we have only the tool of stamp duty and registration and it has seen a fall of 10%,” said K Shanmugam, principal secretary, Department of Finance, Government of Tamil Nadu. In a press conference following the budget speech, he added, “the general sentiments is that the sector would pick up now. The supply side is doing well, but the demand has to pick up.”
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The minister, in his speech, said, “In accordance with this low growth, the estimates have been reduced by Rs 652.24 crore in the Revised Estimates 2013-2014. In the Budget Estimates 2014-2015, the revenue from registration and stamp duty is estimated to be Rs 10,470.18 crore, assuming a growth of 13.54 per cent.
“This fiscal, right from the beginning, was marred by continuous slow growth in the State tax collections. This downtrend is particularly severe in commercial taxes where the tax collection target is being reduced by Rs 2,734.72 crore,” said the State Finance Minister.
He added, as a result of streamlining of excise duty on alcoholic beverages, Rs 8,601.22 crore, was originally estimated as excise revenue in the Budget Estimates 2013-2014, was shifted to the estimate of commercial taxes. The tax collected through the sale of alcohols through the Tamil Nadu State Marketing Corporation (TASMAC), which includes the sales tax and state excise, during 2013-14 is Rs 23,401 crore. In 2014-15, it is projected to become Rs 26,295 crore.
The sales tax through TASMAC for 2013-14 is Rs 17,532 crore, and state excise Rs 5868 crore. For the year 2014-15, sales tax is expected at Rs 19,812 crore, State excise would be Rs 6,483 crore.
The modified target for the commercial taxes for 2013-2014 was Rs 64,626.46 crore, which has now been downsized to Rs 61,891.74 crore in the Revised Estimates 2013-2014. For the coming financial year also, the Government is constrained to make a conservative projection of only a growth of 11.04 per cent over the Revised Estimates 2013-2014. In the Budget Estimates 2014-2015, the commercial taxes have been estimated to contribute Rs.68,724.06 crore.
Similarly, the targets for excise revenue were also modified after the streamlining of excise duty. Thus, the original estimate of Rs.14,469.87 crore has been revised to Rs.5,868.65 crore in the Revised Estimates 2013-2014. Assuming 10.47 per cent growth, the estimated excise revenue in 2014-2015 will be Rs 6,483.04 crore.