Kejriwal confirms Rs 3,000 crore VAT collection shortfall

Chief Minister Arvind Kejriwal on Wednesday confirmed that his government is facing a VAT shortfall of Rs 3,000 crore, raising doubts of inefficiency of team which allegedly set unrealistic targets and failed to deliver as per the Budget proposals.

The dwindling collection of VAT was admitted by Kejriwal while giving out figures on the loan offered to the financially ailing corporations so that the strike by their wageless employees could end.

In one of his tweets, Kejriwal said: “It is with great difficulty that we hv been able to find this Rs 550cr for loan. Del govt is facing Rs 3,000 cr VAT shortfall.”

The shortfall proves that Kejriwal’s strategy of urging traders to voluntarily pay VAT seems to have not worked as expected in achieving a VAT collection of Rs 24,000 crore.

A senior VAT department official, however, claimed they were still hopeful of meeting the target in the last quarter of the fiscal.

Soon after taking other the Chief Minister had promised traders that there would be no harassment through raids but the businessmen should pay VAT honestly.
He also stressed on increasing electronic surveillance on VAT evaders.

Despite a 30 per cent augmentation in surveillance in VAT evasion, the department has only managed to collect Rs 15,000 crore.

Since, Rs 2,400 crore would come from central tax pool, our real target is Rs 21,600 crore which are hopeful of meeting as there is usually a spike in VAT collections in the last quarter, said an official.

As per the tax revenue target set by Finance Minister Manish Sisodia, VAT is supposed to contribute 69 per cent, excise 12 per cent, stamps and registration 11 per cent, tax on motor vehicles six per cent and luxury, entertainment and betting tax two per cent.

The impact of low VAT collections so far has been casting a shadow on government’s revenue and expenditure. The total expenditure of Rs 41,129 crore was planned to be financed mainly from the tax revenue of Rs 34,661 crore.

Till December, the government collected about Rs 21,820 crore which was about Rs 12,841 crore short of the target.

Meanwhile, the VAT department’s scheme to involve public for VAT evasion surveillance through an App-based reward scheme which encourages shoppers to send a copy of their bill through WhatsApp is proving to be a success.

VAT Commissioner S S Yadav said the first lucky draw will be held this week. Within a period of less than two weeks after launch of the App the department has received 3,500 bills through this App.

The bills received under the scheme help the department in identifying dealers involved in tax evasion and fraud.  Each bill is verified to ensure that the dealer is not manipulating the bills or evading the sales data. 

The participation of people in such large number through the App will ensure that the tax paid by the people reaches the government said Yadav.

This app can be downloaded from Playstore for Android phones and Appstore for Apple phones. The app can also be downloaded by giving a missed call on the phone number 01125776903.

Yadav said from  January 18 to 31, one per cent of the entries received will get prize equal to five times the value of goods purchased (excluding tax), subject to a maximum of Rs 50,000.  For January, 35 people will get prizes.