The All India Tax Advocates Forum (AITAF) today asked the Delhi government not to propose any hike in VAT during the budget for next fiscal in view of the rising inflation and instead focus on realising tax dues amounting to over Rs 3,000 crore. "Delhi is in need of resource mobilisation to fund its manifold developmental activities. But, it will not be advisable to raise resources through further hike in VAT (value-added tax) rates in view of rising inflation, which is hitting the common man very hard," AITAF President M K Gandhi said in a statement.

He said as the exercise for preparation of the Budget 2012-13 for the Delhi government gathers momentum, all efforts must be made to recover tax dues locked up in thousands of tax disputes cases rather than raising VAT. Before VAT came into force in 2005, sales tax demand of nearly Rs 650 crore was locked up in as many as 3,249 cases, which are at various stages of appeals.

Similarly, an amount of nearly Rs 2,400 crore is stuck due to nearly 14,800 objection cases pending before VAT authorities for disposal, the statement said. "The Delhi government targeted to raise revenues of over Rs 12,500 crore through VAT in 2011-12. Thus nearly 25 per cent of VAT revenues have been locked up due to pendency of disposal of appeal and objection cases. "Therefore, the government should focus on expeditious disposal of these pending VAT-related cases," Gandhi, who is also a leading tax consultant, said.