GUWAHATI, Jan 13 — Assam’s own tax revenue is only four per cent of the Gross State Domestic Product (GSDP) against the national average of six per cent, said Committee on Fiscal Reforms (COFR) in its report, which was submitted to the State Government on December 7 last. The 11th Finance Commission assessed the State’s revenue receipts from its own tax and non-tax sources for the period 2000-2005 at Rs 12,953.22 crore with the assumption that the tax revenues of the State would grow at the uniform rate of 13.20 per cent every year. And, in respect of non-tax revenues, it was expected that the growth rates would be 16.70 per cent in the second year, 15.62 per cent in the third year, 14.90 per cent in the fourth year and 19.56 per cent in the fifth year.
Against these, State Government’s estimates of its own revenues — tax and non-tax fell short of the Finance panel’s by Rs 17 crore in 2000-2001 and by Rs 100 crore in 2001-2002. The situation will deteriorate further in this regard in the remaining three years of the 11th Finance Commission’s term if the present trend continues, the COFR said in its report. To overcome this situation, the COFR felt the need for administrative reforms to improve the sales tax earning scenario. This reforms should be aimed at undertaking an intensive survey of potential assessees all over the State and steps to ensure regular payment of tax by the assesses. A separate survey may also be made, in the nature of a Bench Mark Survey, simultaneously by some independent agency/agencies to assess all traders and potential taxpayers. This survey may initially be confined to Guwahati, Dibrugarh and Tinsukia.
The COFR report said that the Bench Mark type survey should be undertaken forthwith and completed within September 30 this year. Besides, to plug the loopholes facilitating leakages of sales tax revenue, a monetary limit of Rs 100 may be adopted by the State making issuance of cash memo/bill obligatory in case of any sale exceeding that amount, the COFR report said. To strengthen the recovery wing of the Tax Department, a self-contained code on the lines of the Central Income Tax Act should be prepared empowering the Recovery Officers to proceed against both moveable and immovable properties of the evaders. Moreover, the Government may also invoke the provisions of the Assam Taxation (Publication and Information) Act, 1975 to periodically publish the names of defaulters and evaders of sales tax and other taxes, the report said.
It also recommended constitution of a high-powered committee to review the working of the check-posts, their effectiveness and to recommend the changes, if needed, in regard to their infrastructure, paracitices and procedures. It may be profitable to associate the Accountant General (Audit) with the committee. Computerisation of the check-posts, pending review of their working, should also be done, in three phases within a period of one year, so that the process of computerisation is completed before the introduction of Value Added Tax (VAT), the COFR report said, inter alia. The report also suggested that the State Government should vigorously pursue the cases of the amount of over Rs 533 crore which is overdue from the IOC (nearly Rs 500 crore)_ and the BRPL (about Rs 33 crore), and assign the entire task to a competent officer.
The COFR estimated that following the implementation of the reforms recommended by it, the total sales tax revenue of the State should improve by about 30 per cent, ie, in a full year the sales tax receipts should increase by about Rs 270 to Rs 300 crore, from the present level of about Rs 900 crore. It also recommended a thorough survey and steps for recovery in the case of tax on green tea leaf and doubling the land revenue rates for rural areas and hundred times enhancement of land revenue rates for urban areas. In any case, enhancement of the land revenue rates for urban areas should not be less than 20 times, the COFR report said.