The reduction of Central Sales Tax (CST) to 2 percent, validation of entry tax levy pending before the Supreme Court and slow down in the economic activities have led to negative growth in collection of commercial tax in Orissa in February 2009.

The collections comprising of Value Added Tax (Vat), CST, entry tax, professional tax, Orissa Entertainment Tax (OET) and Orissa Land Tax (OLT), declined by 0.32 percent to Rs 483.95crore in February this year from Rs 485.48 crore during the same month last year.

However, the progressive collection of commercial taxes up to the end of February 2009 increased by 14.87 percent to Rs 4597.16 crore as against Rs 4001.92 crore in the corresponding period of the previous fiscal, sources said.

The progressive collection of Vat up to February 2009 was Rs 3499.23 crore which is 20.32 percent higher than Rs 2908.26 crore collected in the same period last fiscal. It continued its uptrend in February this year with the collections increasing by 9.4 percent to Rs 383.75 crore from Rs 350.62 crore.

The stiff fall was recorded in the collection of CST in February with a drop of 40.71 percent to Rs 37.61 crore from Rs 63.49 crore in the same month last year. The progressive collections up to February this year also declined by 1.99 percent to Rs 471.55 crore from Rs 481.1 crore in the previous fiscal.

Sources said, entry tax collections were severely hit as a number of companies obtained stay in the operation of the entry tax levy in the state. Though the cumulative collections upto February this year increased marginally by 1.03 percent, collections in February dipped by 15.13 percent to Rs 53.76 crore.

While the professional tax collections increased by 12.94 percent during the first 11 months of the current fiscal to Rs 74.42 crore, the Orissa Entertainment Tax (OET) and Orissa Land Tax (OLT) collections declined by 13.51 percent during the same period.

The general slowdown in the manufacturing sector and large number of litigations in the collection of entry taxes has impacted the overall collections. We hope to end the fiscal with a growth of about 10 percent over 2007-08, an official said.