Traders to face heat for failure to deposit VAT

The AAP government is all set to crack the whip against about 1.50 lakh registered dealers who have failed to deposit their value added tax (VAT). Of about 3.25 lakh registered dealers in the city, about 45 per cent dealers have not paid their VAT so far. The VAT department is finding difficult to meet the revised target of Rs 21,000 crore VAT in the current fiscal year.

The government has already started reaching out to the defaulters through personal and customised phone calls and text messages. Even advertisements are being issued urging defaulters either to pay up their taxes or face action.

One the main reasons being cited by dealers who have not paid their taxes is that they had been selling goods which do not fall under the VAT ambit. Many defaulters also claim their sales have been far less than the actual purchases they had made during the current financial year. There are many who claim that they had already closed their business for the current fiscal.

Of the revised scaled down VAT target of Rs 21,000 crore, the AAP government has been able to raise only Rs 18,851 crore so far. The government had earlier set a target of Rs 24,000 crore for VAT collections. A senior officer said that the government was unlikely meet even revised VAT target as it was not realistic.

Reports show that the government was able to generate Rs 16,966.21 crore till March 17 in 2014-15. It has, however, been able to raise Rs 18,851.30 crore through VAT collections during the same period in the current fiscal. On an average, the government was able to raise Rs 399.78 crore every month in last fiscal. In the current fiscal, the government has been able to collect Rs 572.63 crore VAT every month.

While the monthly growth rate through VAT collections has been 43.24 per cent, the annual growth this fiscal has been 11.11 per cent. In the last fiscal, the VAT collections raised by the government was Rs 946 crore in April, Rs 1,212 crore in May, Rs 1,648 in June, Rs 1,725 crore in July, Rs 1,479 crore in August, Rs 1,515 crore in September, Rs 1,669 in October, Rs 1,654 in November, Rs 1,462 crore in December, Rs 1,832 crore in January, Rs 1,419 crore in February and Rs 1,988 crore in March. In the current fiscal, the government raised the VAT collection to the tune of Rs 1,475 crore in April, Rs 1,518 crore May, Rs 1,534 crore in June, Rs 1,718 crore in July, Rs 1,538 crore in August, Rs 1,551 crore in September, Rs 1,801 crore in October, Rs 1,751 crore in November, Rs 1,757 crore in December, Rs 2,022 crore in January and Rs 1,610 crore in February.