The Commercial Tax Department achieved nearly 68 per cent of its target for the year 2014-15 by the end of January 15. Against a target of collection of Rs 15,041 crore set for the year, the Department has been able to collect Rs 10,180 crore only. Now, it is anybody’s guess that the rest amount cannot be collected in the remaining two months.
Commercial taxes contribute more than 50 per cent to the total Government revenue receipts. The dismal position in collection of commercial taxes has put the Government in a fix in preparing the Budget for the next year with promises of a lot of freebies. There is no certainty either that the position would improve in the coming months.
Value Added Tax (VAT) contributes nearly 79- 80 per cent of the taxes collected by the Commercial Tax Department. The Department has collected Rs 8,079 crore up to January end as against collection of Rs 7,255 crore up to January 14, registering a growth rate of 11.35 per cent. Entry tax contributes around 12 per cent of the commercial taxes, which has registered a growth rate of 6.72 per cent only. Collection of entry tax during this year up to January end is Rs 1,257 crore as against collection of Rs 1,178 during the corresponding year of last year. Only Central Sales Tax (CST) has a good growth rate; collection of CST is Rs 719 crore up to January end compared to collection of Rs 548 crore during the corresponding period last year. The growth rate in CST collection is 31.23 per cent. But the CST only contributes around 7 per cent of the commercial tax collection.
One of the reasons for dismal performance in collection of tax is closure of mines, says a senior officer of the Department. Collection of VAT and CST from mining sector is negative, -11 per cent by the end of third quarter. Not only that, closure of mines also has effect on the related sectors in tax collection. There is less movement of vehicles and less consumption of diesel; so it has adversely impacted on collection of tax from diesel. Similarly, there are fewer sales of heavy vehicles and less sale of tyres and automobile spare parts. A senior officer of the Mines Department said truckers now hide their trucks lest their vehicles should be seized by the lending banks/organisations as they are unable to pay installments of their loans taken for buying the vehicles. Collection of taxes from automobile tyre and tubes and automobile spares have registered negative growth rates by end of the third quarter, minus 1 per cent and 1.19 per cent respectively.
In Odisha, industries are mainly mineral based. Closure of mines has a direct impact on the industrial sectors marked by less production.