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AP records 23.63 per cent growth in commercial tax


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Hyderabad: The Andhra Pradesh government has earned a revenue of Rs 8,250 crore from commercial taxes, the highest increase in any state in the country.

Riding high on increased prices of cigarettes and liquor, the state has reported a 23.63 per cent increase in tax revenue. The latest figures for the quarter ended in June, 2016 have shown dramatic growth in all revenue earning sectors.

While the income from taxes on cigarettes and liquor continues to grow more than the national average, the state lags behind in revenue from petro products and major public sector undertakings. AP has reported better revenue in the first quarter of the year. Figures show nearly 24 per cent increase in June. We are expecting further improvement in other sectors including petroleum products and manufacturing as many new industries are coming up in the state," Ajey Kallam, special chief secretary, finance department told TOI.

The state received Rs 173 crore from tax on cigarettes, Rs 2,040 crore from liquor, Rs 2,208.83 crore from petroleum products and Rs 41.40 crore from major PSUs. While tax in the form of VAT and CST was reported at Rs 7812.70 crore, income from other taxes totalled Rs 437.3 crore. Vijayawada continues to race ahead of other districts in the state with over Rs 999.96 crore revenue in just three months.

Post bifurcation and announcement of Amaravati as capital, the Vijayawada region was divided into two tax divisions, Vijayawada-I and Vijayawada-II. The two divisions combined have earned Rs 1,297.31 crore. It was followed by Visakhapatnam with Rs 430.56 crore and Kurnool with Rs 247 crore.

Interestingly, most of the companies which have shifted their base from Hyderabad have reported steep growth in sales during the first quarter in the current fiscal. Earlier, the tax revenue from Vijayawada used to hover around Rs 600 crore which has crossed Rs 1,250 crore for the first time.

"The growth is indicative of changing economics in favour of AP. For the first time, all the dynamics of tax structure are showing positive movement. But to sustain the double digit growth, we need to make the system more transparent and business-friendly. The CM has already directed revenue generating departments in that direction," A Kutumba Rao, economist and vice-chairman of AP planning board told TOI.

However, the state government is worried over not so an impressive income from petro products. Against a target of Rs 2,706 crore, the state could earn only Rs 2,208 crore in the first quarter of the fiscal. "AP has been imposing higher tax on petrol and diesel apart from Rs 4 additional cess on diesel. To avoid high prices in the state, truck operators have been purchasing fuel in neighbouring states causing drop in sale in the state," pointed out an official of the commercial tax department.

Though it was planned to remove the additional cess, CM did not agree to this and asked transport department to study the pros and cons of higher tax on petro products and submit it to the cabinet.

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