Delhi government may fall short of VAT target again

The AAP government, which had set a target of Rs 24,000 crore for VAT collections this year, is said to have decided to bring it down to Rs 21,000 crore

The AAP government’s third hike of value added tax on both petrol and diesel has again raised a serious question whether the administration would be able to meet its Rs 24,000 crore tax target this year in the national capital. While VAT collections have shown a marginal increase, the Kejriwal government is mulling a plan to lower the VAT target by about Rs 3,000 crore for the current financial year.

The AAP government, which had set a target of Rs 24,000 crore for VAT collections this year, is said to have decided to bring it down to Rs 21,000 crore. In all, Rs 18,554.91 crore were raised by the city government through VAT collections in the previous financial year.

A highly-placed source said that the AAP government was seriously considering reduction of its annual target of VAT collections by Rs 3,000 crore as it fears that it would not be possible for it to meet the set target of Rs 24,000 crore. The government had been making serious efforts to increase the VAT collections.

On Monday, the AAP government launched an application requesting people to directly upload their bills of goods they purchase in the city so that they could be rewarded through lucky draws. The main aim of the government to launch the lucky draw scheme is 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 end up paying VAT to the administration.

Statistics show that the AAP government had managed to collect Rs 186.13 crore in VAT for the first 13 days last year, but the collections dropped to Rs 181.21 crore in the corresponding period this year. The total VAT collection, however, made till January 13 in the current financial year has shown a marked improvement in comparison to the collection made during the corresponding period in the last financial year. In addition to this, the Central government has also paid the city administration Rs 1,600 crore, an amount it owned to the state on sales tax collections.

A senior officer said: “We were able to raise Rs 13,501.01 crore till January 13 in 2014-15. But the collections have gone up to Rs 14,827.22 crore during the same period in the current financial year.”

Surprisingly, the VAT collections made on January 1 this year were Rs 30,31,79,044, which is almost three times more than raised on the first day of 2013-14 and 2014-15 financial years. However, on January 2 this year, the VAT collections fell down to Rs 7,21,05,154 this year from Rs 12,87,71,582 in 2013-14 and Rs 8,47,45,906 in 2014-15.

The monthly data on the VAT collections shows that the government raised more money in April, May, August, September, October, November, December in 2015-16 in comparison to the corresponding period in the previous year. But in June and July, the VAT collections raised in the previous year were on the higher side compared to this year.