There is some good news. Demonetisation of old currency notes of Rs 500 and Rs 1,000 is filling Government coffers. Contrary to the perception that revenue generation of the AAP Government has been hit after demonetisation drive, the Value Added Tax collections from November 9 till November 17 in the national Capital have almost remained the same in comparison to the collections made during the same period in 2015.
The Excise duty collection remained almost the same but reports do suggest that sale of liquor in retail vends which had dropped by almost 40-50 per cent on the first day of demonetisation is gradually picking up in the city. The VAT department has also increased date till November 21 to file return.
This means, VAT traders may file their return by November 21.
Most of the city's developmental activities depend mainly on the buoyancy and elasticity of VAT, which constitutes nearly 65 per cent of the Government's tax revenue. While the Government got about Rs 16.19 crore on November 9 through VAT, it was able to collect about Rs 16.29 crore on the same day in the previous year.
The VAT collections which saw a dip of about Rs 8 crore on the second day of demonetisation, went up by about Rs 7 crore on November 12 in comparison to the revenue generated in the corresponding period last year. The VAT collections, which touched a record of about Rs 57 crore on November 16, were about Rs 38 crore in the previous year.
According to data accessed by The Pioneer, Delhi's VAT collections have seen a slight increase after demonetisation. It has collected Rs 16,19,21153 on (November 9); Rs 16,9077085 (Nov 10); Rs 22,5289433 (Nov 11); Rs 36,6693438 (Nov 12); Rs 8383509 (Nov 13); Rs 4054913 (Nov 14); Rs 38,56,74583 (Nov 15); Rs 57,49,84361 (Nov 16) and Rs 56,44,61693 on November 17 after demonetisation.
It had collected Rs 16,29,35445 (Nov 9); Rs 22,86,40082 (Nov 10); Nov 11 ( holiday ); Rs 29,68,11244 (Nov 12); Rs 23,84,07007 (Nov 13); Nov-14-15 (Holiday) and Rs 38,98,03420 ( Nov 16) and Rs 60,80,09392 (Nov 17) during the same period of the last fiscal year.
But the VAT collections made post demonetisation are not any indicator of the sale of goods that the traders have made since November 9. Elaborating on this, a senior officer said, "No one deposits VAT on a daily basis. These tax deposits have been made about the goods which have been sold by the traders in the previous months."
The reason why traders have been meticulously paid VAT is because the Government has introduced a series of measures to check leakages in tax collections. The Government had already made it clear that it will not spare about 1.50 lakh of the 3.25 lakh registered traders who had failed to deposit their VAT.
Also, CCTV cameras had been installed at the entry points of the neighbouring States to ensure that goods entering the city are taxed properly. Even notices had been sent to those traders who had not paid VAT on goods which they had supplied across the city.
Insiders said there is possibility that traders have shown sale outside Delhi and paid taxes to the department. There is also possibility of recovery of bad debts. "Traders have paid their debts," said insiders. Another theory doing the rounds in the department is that traders have paid taxes in old currency to convert it from black to white money. On the other hand, experts said the increase of VAT collection is the impact of Diwali sale. "The final impact of demonetisation would be reflected in January or in December end. There are 1,500 or 2,000 traders who pay 70-80 per cent VAT to the Delhi Government. Similarly, 30-40 percent VAT comes from diesel and petrol sale. Petrol pump dealers are accepting till old currency notes. The impact would be on those who pay cash or do business in cash," said a former VAT commissioner on the condition of anonymity. He further pointed out that after Diwali there is huge decline in sale of television in Delhi.
On the other hand, retailers claimed that the cash crunch has come as a big setback for the retailers and the exact impact will be known in a week or so. Most of the retail liquor venders claimed that there is a decline of 40-50 per cent in the daily sale after demonetisation of old currency notes. But the collection of excise duty is almost same as compared to last fiscal year. The excise department has collected Rs 2,500 crore till November that is similar to last fiscal year.
A shopkeeper claimed that on the day of the demonetisation there was a decline of about 40 per cent sale in different liquor brands. "Now the sale of liquor is picking up. Many customers are using plastic money to purchase their favourite brands," a shopkeeper in Mayur Vihar Phase I said.
"There is also no shortage of supply of any liquor brand," he said. Data available with the Delhi Government showed that there are 704 restaurants with bar licences besides 399 shops in malls with liquor licences. The number of Government-run vends stands at 350. The problem is said to be worse in west and east Delhi where almost everyone uses cash to by liquor.