Reforms declared to increase revenue

Government collected only Rs 35,664 crore in sales tax till Sept against target of Rs 76,289 crore

Worried that only Rs 35,664 crore has been collected in sales tax till September against the Rs 76,289-crore target, the Maharashtra government has announced reforms to increase revenue. Finance minister Sudhir Mungantiwar on Tuesday held an urgent meeting with sales tax officials during which they were instructed to meet the target by bringing about some changes in the system.

“The sales tax collection till September has been Rs 35,664 crore against a target of Rs 76,289 crore. We are hoping to reach to the target by March and have taken some immediate measures. We have also got an assurance from the Centre that it would compensate loss of revenue to the state,” the finance minister said.

In the meeting that held on Monday, various steps were mooted like computerisation, decentralisation, reducing irregularities and improving the ease of doing business for traders. “We have sped up the work and ensuring that tax evasion will not be easy. Also, we are making a few processes simple for the traders so that they are not harassed,” Mr Mungantiwar said.

Holding the overall slowdown in the market responsible, the finance minister said that sops given for welfare measures have made the state financially weak. “We have given Rs 4,500 crore for farmers in drought-hit areas. Local civic bodies were paid Rs 5,000 crore to abolish local body tax, revenue of Rs 750 crore was waived off by abolishing tolls and Rs 900 crore was given for subsidiary food grains for farmers in drought areas. There was no provision for all this in the budget,” Mr Mungantiwar said.

Sources in the finance department said not only the sales tax department but also the revenue and urban development departments have failed to meet their targets. The urban development department was given a target of Rs 5,000 crore, which is impossible to fulfil despite it charging more premium. At the most, the department can collect Rs 3,000 crore, the sources said.