VAT collection doubled in Delhi in 5 yrs

The VAT,considered as simple and transparent,was introduced in the city on April one,2005 and from that year onwards the revenue collection of Delhi Government witnessed marked improvement.

Following introduction of VAT,the revenue collection in the fiscal 2005-06 went up to Rs 6,499 crore from Rs 5,199.76 crore in 2004-05,registering a growth of 25 per cent.

The total tax collection further improved to Rs 7,365 crore in the fiscal 2006-07 and it reached Rs 8493 crore in the next year,registering an annual growth of 15.32 per cent.

In 2008-09,the city government mopped up a total VAT of Rs 9,669.55 crore.

In his budget speech,Delhi Finance Minister A K Walia had projected to collect Rs 12,000 crore from VAT in 2010-11 which is 77 per cent of the total expected revenue collection.

The government expects to collect a total of Rs 15,582 crore from tax revenue in the current fiscal.

Officials said with self-compliance by the traders to pay VAT increasing,the administrative costs to collect the tax has also come down in the last few years.

They said with introduction of VAT,the tax collection has become more transparent also. “It is a self-policing system based on invoices and thus curbs tax evasion.”

Although,the tax collection has gone up significantly following introduction of VAT in the national capital,the CAG in the latest report has mentioned about the deficiencies and lacunae in the tax collection mechanism.

The CAG,while recommending several steps for improving tax collection,said more emphasis should be given to e-governance and training of the staff of the tax department.