While the government has cited poor tax collections and the Commonwealth Games as reasons for hiking the Value Added Tax (VAT) for a host of items, the Capitals excise collections have seen an impressive overall growth of 22 per cent through 2009-10.
The government has already managed to collect Rs 1,511 crore by the first week of March this year. It is expecting to surpass its initial target of Rs 1,600 crore by the end of the month.
Excise officials claim 91 licences issued to liquor vends, restaurants and bars are the reason behind the jump in excise collections this year. The government had managed to collect about Rs 1,480 crore in 2008-09.
Since alcohol is cheaper and authentic, people from neighbouring states come to buy liquor from the city, a Delhi government official said.
Of the 91 liquor licences issued this year, 20 have been given to government liquor shops, 11 have been given for country liquor vends, while the rest have gone mainly to restaurants and departmental stores.
Officials added a big chunk of the revenue Rs 873 crore was generated through government liquor shops. While private liquor shops brought in Rs 280 crore, restaurants, clubs and hotels have together generated a collection of Rs 62 crore.
Departmental stores have generated Rs 12 crore, while imported foreign liquor managed to contribute Rs 37 crore till March 1. The revenue generated from country liquor was Rs 190 crore this year.
Finance Minister Dr A K Walia said while the government has set a VAT collection target of Rs 12,000 crore, the hike will contribute to only about Rs 1,000 crore additionally to the exchequer. The government had managed a tax collection of Rs 11,566 crore in 2009-10.
While the government has received Rs 2,700 crore from the Centre for the Games projects, Walia said the VAT hike and the withdrawal of subsidy on LPG cylinders was essential.
In his Budget speech on Monday, Walia said the governments collection through taxes has not been adequate due to the downturn. The minister said till June 2009, the pace of tax collection showed a negative growth of 6.93 per cent mainly due to the slowdown. We have managed to register a growth of 6.85 per cent till February 2010, he said.