Notwithstanding the current slowdown, Punjab is hopeful of registering an increase of 10-15 per cent in VAT(Value Added Tax) collection in the financial year 2009-10 over the last financial year. However, the VAT collection in the first five months of the current fiscal year is not very encouraging as the state registered an increase of only 7 per cent over the corresponding period last year.
According to the data, in the first five months of the current fiscal year(April-August 2009), the state managed to collect Rs 3,310 crore as VAT as compared to Rs 3,100 crore it collected during the corresponding period (April-August 2008) last year. That amounted to a growth of 7 per cent over the corresponding period of the last year.
In an interaction with Business Standard, Excise and taxation commissioner A Venu Prasad said, We are hopeful that we would be able to achieve a growth of 10-15 per cent in the current fiscal year, despite the fact that the VAT collection in the first five months of the current fiscal year was not encouraging. We foresee that the VAT collection in the coming months will increase exponentially, which will help us in meeting the target.
It is pertinent to mention here that in the last fiscal year 2008-09, VAT collection in Punjab registered an increase of 22.2 per cent over the corresponding year 2007-08. The state collected Rs 6,773.76 crore in 2008-09 as against Rs 5,543. 49 crore during the corresponding period last year.
According to a PHD Chamber study, by plugging the loopholes of tax evasion among traders, the states should be able to augment revenue this year. The poor condition of mobilisation of resources is a matter of concern as the state governments could collect higher revenues by appropriate procedural measures to ensure foolproof compliance, said Satish Bagrodia, President, PHD Chamber.
In order to put a check on tax evasion, the department keeps on tab on transaction done by the industrialists and traders.
Recently, the department has found that as many as 170 business firms were found indulging in bogus transactions with some fake companies to claim exemption from VAT to the tune of Rs 2,000 crore. During the investigation, it was found that neither the seller nor the buyer in several cases could be traced as the address mentioned in the invoice was fake.