Bhubaneswar, March 27: The state government has decided to abolish all inter-state border check gates from April 1. The measure is part of the proposed goods and service tax (GST), expected to be implemented this year.

Odisha, which borders Bengal, Chhattisgarh, Jharkhand and Andhra, has 17 check gates.

The check gate at Nalda in Keonjhar's Barbil will continue to be operated by the steel and mines department for collection of mining royalty.

"Under the proposed GST regime, establishment of check gates or barriers is not envisaged," finance minister Pradip Kumar Amat told the Assembly today. Abolition of border check gates will promote ease of doing business and the tourism sector. "It will save time, fuel and facilitate transportation of goods and raw materials," he said.

The minister said static gates checking every vehicle appears to have outlived their utility. "The manpower now deployed for the task will be used for mobile enforcement (of taxes) using modern methodology," he said.

The state government established the check gates in 1947 to collect sales tax. Apart from the commercial tax organisation under the state finance department, other departments such as transport, forest and excise also used the check gates for enforcement purposes.

Amat said the authorities received complaints of difficulty in movement of passengers and goods because of the gates.

In a related development, the government today said the collection of commercial taxes till February for the current financial year has been 3.35 per cent higher than the corresponding period the previous year. This, despite the demonetisation of Rs 500 and Rs 1,000 currency notes from November 8.

"The impact of the demonetisation on sales tax collection was negligible," said a senior government official. "In most of the cases, there was online payment of sales tax."

By February end, commercial taxes including value added tax, central sales tax, entry tax, professional tax and entertainment tax to the tune of Rs 12,946.30 crore had been collected.

"This was Rs 419.49 crore (3.35 per cent) higher than the corresponding period of the previous year," said the finance minister.

The growth rate could have been 15 per cent, had the value added tax due on Indian Oil Corporation Limited toward its products from its Paradip oil refinery project could have been realised. A sum of Rs 1,477 crore was due from Indian Oil by end of February towards VAT, said an official.

Indian Oil had sought VAT exemption for the oil refinery project and the state government has recently decided to withdraw the exemption. The dispute is pending in court at the moment.