The city of diamonds has always been in the forefront when it comes to revenue collection by Central government, state government and municipal corporation.

In one such development, the income from collection of value-added tax (VAT) by the sales tax department has increased by 11 per cent from April to October 2011 at Rs.2593 crore compared to Rs 2,290 crore - an increase of Rs 303 crore - during the same period in previous year.

Official sources said the state finance department has revised the VAT target from Rs 4,018.81 crore in 2010-11 to Rs 5,790 crore for 2011-12. In seven months starting from April-2011, the department has collected VAT income to the tune of Rs 2,593 crore.

A senior sales tax officer admitted that inflation has led to an increase in the VAT income for the department.

As consumers in the diamond city are buying more and with the prices of petrol, diesel, natural gas and CNG increasing, the traders and the manufacturing companies have to pay more VAT.

"VAT makes the largest contribution to the state when compared to other taxes and Surat is the second biggest contributor after Ahmedabad. This could be gauged from the fact that the state finance department has increased Rs 1,718 crore income target in 2011-12 compared to previous year," said the sales tax officer.