In a bid to increase VAT collections, the Arvind Kejriwal Government on Monday night raised VAT or local sales tax by one per cent on two fuels - petrol (96 paise per litre) and diesel by 53 paise.
Petrol now costs Rs59.99 per litre as against Rs59.03 a litre previously. A litre of diesel now costs Rs44.71 as opposed to Rs44.18 previously. There are apprehensions that the increase in VAT on fuel may escalate inflation further in the national Capital.
Facing drastic fall in VAT collections, the Delhi Government has also decided to reduce its set target from Rs24,000 crore to Rs 21,000 crore in the current fiscal year. The Government has collected only Rs16,600 crore till January 17 this year. About Rs18,554.91 crore were raised by the Government through VAT collections in the previous financial year.
Officers said the falling petroleum prices have resulted in less collection in VAT. The 15-day odd-even trial affected the VAT collection on the sale of oil and it came down by 25 per cent.
Top sources told The Pioneer that the Delhi Government raised VAT on petrol to 27 per cent from 25 per cent, resulting in a 96 paise a litre hike in retail pump rates. Similarly, the VAT on diesel was increased from 16.6 per cent to 18 per cent. A pollution cess of Rs0.25 per litre is also levied on diesel.
“On the basis of the decision taken in the meeting of Finance Ministers of Northern States for bringing uniformity in the tax rates, the Delhi Government on Monday rationalised the VAT rates for petrol and diesel. The VAT rate for petrol has been revised from 25 per cent to 27 per cent and for diesel from 16.6 per cent to 18 percent,” a Delhi Government statement said.
On Monday, the Government launched an app requesting people to directly upload their bills so that they could earn rewards through lucky draw and help the Government in nabbing tax evaders. Besides, the Government wants to ensure that customers force the shopkeepers to provide them with genuine bills so that VAT inspectors could keep a track on the sales of such businessmen and ensure they were paying VAT.
Statistics show that the Government had managed to collect Rs186.13 crore VAT for the first 13 days last year. The collections had dropped to Rs181.21 crore in the corresponding period this year. But the total VAT collections made till January 13 in the current financial year had shown a marked improvement in the collections raised during the corresponding period in the last financial calendar. In addition to this, the Central Government also paid the Delhi Government Rs1,600 crore, an overdue Central Sales Tax amount.
Sources said, “We were able to raise Rs13,501.01 crore till January 13 in 2014-15. But the collections have gone up to Rs14,827.22 crore during the same period in the current financial year.”
Surprisingly, the VAT collections made on January 1 this year were Rs30,31,79044, which is almost three times more than raised on the first day of 2013-14 and 2014-15 financial years. But on January 2 this year, the VAT collections fell down to Rs7,21,05154 this year from Rs12,87,71582 in 2013-14 and Rs8,47,45906 in 2014-15. Total growth rate of VAT collection is 9.82 percent till date.
Chief spokesperson, Delhi Pradesh Congress Committee (DPCC), Sharmishta Mukherjee said, “Delhi’s revenue collection growth rate has come down alarmingly from 21.2% in 2012-13 to 2.64% in 2014-15. Will it be negative in 2015-16IJ”
The monthly data on the VAT collections shows that the Government raised more money in April, May, August, September, October, November and December in 2015-16 in comparison to the corresponding period in the previous year. But in June and July the VAT collections were vice versa.