Commercial Tax department is boasting of 16% growth in revenue collection in the first six months of this fiscal, but economists suggest that spiraling inflation has fuelled the tax collection and not the growth in trade and commerce.
The department has registered 15.59% growth in taxes for the six monthly period of this fiscal, till September 30. All parameters of taxes including VAT, entry tax, professional tax and luxury tax have shown an upward trend in this period.
The department officials attribute the revenue growth to factors such as online tax system and integrated check posts established recently. The State-wide surveys and raids have brought about positive impact on the revenue collection, said a senior commercial tax officer.
Another anti-evasion official claimed that corruption has dwindled significantly as the traders now have the option of making online transactions without dealing with the department staff.
Interestingly the department despite this 'smart' functioning has fell short by 3.2% as per the target fixed by the headquarters for this period. The department has revenue target of `20,934 crore for the current fiscal.
The department has earned tax collection of `8,581 crore till September while the same was `7,423 crore in the same duration in the last fiscal. However, economists are of the view that inflation has fuelled the revenues and not the industrial or commercial development.
Economist Prof RS Tiwari said that prices also have shown upward trend by about 15% viz-a-viz the growth in revenue collection in this period. He opined that petrol/diesel price hike has boosted VAT collection, while revision in DA has increased in collection of professional tax in the State. "When the inflation is eating into savings of one and all, the inflation is the only factor which is fueling tax collection," he claimed.