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Commercial tax collection goes down by 8%

The growth rate of commercial tax collection has dipped to 21.43 per cent in 2013-14 from 29.01 per cent of 2012-13.

This is the lowest growth rate of commercial tax collection, except for 2010-11, since Nitish Kumar-led government took the reins of the state in November 2005.

With Nitish as chief minister, Sushil Kumar Modi as the then finance minister took measures to mop up revenue collection and instil a sense of confidence among the traders to do business and pay taxes. The commercial taxes department has witnessed a steady growth rate of tax collection of over 23 per cent since 2006-07 except 2010-11 when it stood at 20.84 per cent.

But the latest growth rate of 21.43 per cent in 2013-14 assumes significance against the backdrop that the department’s collection has gone down from 29.01 per cent and 26.50 per cent of tax collection growth in the financial years of 2012-13 and 2011-12, respectively.

“Our tax collection has recorded an increase of 21.43 per cent in the last fiscal. The department has been able to mop up tax collection of Rs 13,250 crore in 2013-14 against Rs 10,911 crore of the 2012-13 financial year,” commercial taxes department additional commissioner Krishanand Rai told The Telegraph.

Though the department has fallen short of its target by Rs 308 crore in the last fiscal, the department had set a target of collecting tax of up to Rs 13,558 crore by the end of March 2014 but it could get Rs 13,250 crore, which can be termed “good performance”.

About the reasons for robust growth of over 20 per cent in collections, Rai said achieving the target was possible due to better tax compliance. “The better tax compliance is the result of stringent measures taken by the department and providing online facilities to the dealers,” Rai said.

Department sources said five border check-posts, besides 44 flying squads across the state and complete computerisation of the department have led to better tax realisation.

However, Bihar Chamber of Commerce and Industry (BCCI) expressed doubt over the department’s claim of achieving the tax collection target of 2013-14.

“As per an RTI reply furnished by the department in January 2014, it had set a target of tax collection of Rs 13,643 crore in 2013-14. The RTI reply says that the target was later revised at Rs 16,275.84 crore. First, the department failed to achieve the first target by Rs 393 crore and Secondly, if we take the revised collection target, then the department has missed the target by miles,” BCCI chairman P.K. Agrawal said.

Asked why the department’s target was lower than that of the tax collection figures of 2011-12 and 2012-13, Agrawal said the growth rate of commercial tax collection has gone down in 2013-14 because of harassment meted out to the traders by department.

“Whatever the collection the department could mop up in 2013-14, it was due to the department’s decision to take advance tax from everyone and also the penalties imposed by it. Advance tax and penalties have major role to play in the last year’s collection. If these two are removed from the collection basket, the amount would go down further,” Agrawal said, adding that normally advance tax has, traditionally, been taken from big companies but this time it raised it from everyone.


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