The Punjab government expects an increase in excise and value added tax (VAT) collections in the current financial year. The collection is likely to surpass the Budget estimates target. The state government is likely to collect Rs 4,680 crore as excise duty and collections under VAT & central sales tax (CST) are expected to touch Rs 18,000 crore in the current financial year.
Addressing the members of Punjab Vidhan Sabha in his inaugural address of the fourth Budget session of the 14th state assembly, the Punjab Governor Kaptan Singh Solanki shared that the excise collections till January 2015 were Rs 3,547.83 crore and a total of Rs 4,680 crore was likely to be collected by March 2015, which is Rs 921.25 crore or 24.5 per cent more as compared to previous year. Budget estimate for excise collection for the current financial year was Rs 4,600 crore.
Similarly the collections under Punjab VAT & CST acts are expected to reach Rs 18,000 crore by the end of the financial year as compared to Rs 16,342.6 crore last year. The budget estimate was Rs 17,760 crore.
Solanki said that the state government has streamlined the VAT rates in order to plug leakages, meet the genuine demands of the industry and strengthen revenue mobilisation. VAT rates on iron and steel, polyvinyl chloride and natural gas have been raised. A compounding scheme for re-rolling mills has been formulated in the state.
Recently, in a bid to prevent the loss to state exchequer, the state cabinet gave nod to increase VAT on Polyvinyl chloride, Linear low density polyethylene, Low Density polyethylene and High Density polyethylene. The rate of VAT on these items would now be charged at 8.5 per cent plus 10 per cent surcharge, which would enhance the revenue of state by Rs 20 crore annually. In another major decision, the cabinet also decided to enhance the rate of VAT on natural gas in the state from existing 5.5 per cent plus 10 per cent surcharge to 13 per cent plus 10 per cent surcharge. This would help the state in mopping up additional revenue of Rs 45 crore than the previous year.
Overall, according to the Budget estimates, the state government expects to garner Rs 28,480 crore (state's own tax revenue) in form of various state taxes in 2014-15 as compared to Rs 26,403.60 crore(revised estimates) during the previous financial year. The state government is hopeful to garner the targeted revenue by better tax administration and tax compliance.
Among state taxes, the VAT is a major source of revenue followed by state excise and stamp duty & registration fee.
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A total of Rs 4,680 crore was likely to be collected by March 2015 under excise duty, which is Rs 921.25 crore or 24.5% more as compared to the previous year
