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Commercial tax collection in Odisha went up by more than nine per cent in April-January period, lower than average annual growth rate of 15 per cent seen in last couple of financial years.
Net collection of Odisha Value Added Tax (OVAT) increased to Rs 5,534.18 crore in the first 10-month period of the current fiscal, higher than Rs 5,059.92 crore achieved in the year ago period, data compiled by the state commercial tax office showed.
In January alone, the collections stood at Rs 748.25 crore, up from Rs 653.10 crore collected same month last year.
"The rate of rise could have been more, but due to slow down in mining activities, there was a bigger impact on the collections. We are hoping that 10 per cent rise by the end of this fiscal would be best for us given the current environment," said an official in the department, without wishing to named.
In the mining sector, the state imposes VAT upon sale of iron ore, sponge iron and finished steel products. Besides, it gets motor vehicle tax from commercial transporting vehicles every year and collects taxes on sale of motor fuels like petrol and diesel. The collection has suffered in the current fiscal due to Supreme Court order in May last year, which had asked the state to shut down more than two dozen iron ore mines.
"Clamp down on mining activities had consequential impact on sale of ore, fuel and other sources which contribute to OVAT. The drop in growth rate is because of stunted mining activity only," the official added.
According to estimate by state mines directorate, iron ore production in Odisha could drop below 40 million tonne in 2014-15, less than 76 million tonne excavated in the previous year. Iron and coal transports have large contribution in collection of commercial taxes in the state.
Anticipating lower collection of commercial taxes, the state government has raised VAT on petroleum products to 23 per cent from 20 per cent to boost revenue. However, the recent reduction in fuel prices has neutralised the incremental effect.
The increase in tax collection is mainly because of government order to collect unpaid dues, the official said.
In October, the government had taken a series of measure to arrest fall in revenue collection trends witnessed in the first two quarters of this fiscal. One of the measures included collection Rs 200 crore VAT from National Aluminium Company (Nalco).
Apart from pending dues, settlement of court cases related to dues, revision and scrutinisation of tax demand also contributed to the growth, said the official.
