Tax collection up by 30.5% last fiscal in Punjab

Ruchika M Khanna

Chandigarh, April 2

Much to the relief of the Aam Aadmi Party (AAP) government, the state’s tax revenue in 2021-22 have shown an increase of 30.5 per cent over 2020-21.

The state’s tax revenue has increased by Rs 5,794.57 crore in 2021-22 over the revenue earned in the previous fiscal. Also, there are no pending bills at the treasury. This buoyancy in tax collection means that the new government will have enough legroom to implement its promises of 300 units of free power and Rs 1,000 allowance to every woman.

Information available with The Tribune shows though the maximum increase in tax revenue has been in goods and services tax (GST) at Rs 4,164.73 crore, the VAT collection, too, has increased by Rs 1,546.48 crore over the previous financial year. The central sales tax collection had increased by Rs 65.16 crore, and the Punjab state development tax has shown an increase of Rs 18.20 crore over 2020-21. This shows that the state had buckled the trend by increasing its tax revenues, in spite of an economic meltdown triggered by two years of the pandemic.

The increase in VAT is mainly because of the continuously soaring prices of retail fuels. The previous government had reduced VAT on both petrol and diesel in November last year, which have brought down the total VAT collections. But even then, these are 25.83 per cent higher than the previous financial year (Rs 7,533.98 crore as against Rs 5,987.50 crore in 2020-21).

When the Congress government had taken the reins of the state, they had to deal with an “inheritance of loss” and bills worth almost Rs 7,000 crore were pending at the treasury. However, the Congress government did not leave behind any pending bills, but left behind unpaid power subsidy worth about Rs 8,000 crore, which will have to be paid by the AAP government. Though the government paid the entire subsidy of over Rs 13,000 crore for 2021-22 to Punjab State Power Corporation Limited (PSPCL), the pending subsidy of previous years (Rs 7,117 crore and interest on this) remains unpaid and is carried forward.