PUBLIC FINANCE

Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day heavy tax burden. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise. In this chapter briefly trends in Sales tax, State Excise, Stamps and Registration fees and Motor Vehicle Tax, are dealt with as these taxes are mostly contributing to States own tax revenues.

STAMPS & REGISTRATION FEES

The revenue realised under Stamps and Registration Fees during the year 1998-99 was Rs. 710.04 crores as against Rs. 635.91 crores in 1997-98 and showing an increase of 11.7 percent. The revenue realised under this tax during the year 1999-2000 (upto December 1999) was Rs. 566.98 crores. The following table indicates the details of revenue received from Stamps & Registration Fees from 1994-95 to 1999-2000 (upto December 1999)

Table – 8.1

 

REVENUE RECEIVED FROM STAMPS & REGISTRATION FEES

IN ANDHRA PRADESH DURING 1994-95 TO 1999-2000

(Rs. In Crores)

 

S.NO.

YEAR

REVENUE RECEIVED

1.

1994-95

313.60

2.

1995-96

325.62

3.

1996-99

605.87

4.

1997-98

635.91

5.

1998-99

710.04

6

1999-2000 (upto December 1999)

566.98

Source: Inspector General of Stamps & Registration, Government of Andhra Pradesh, Hyderabad

The month wise revenue particulars for the current year 1999-2000 upto December 1999, is shown in the following Table.

 

Table – 8.2

 

GROSS REVENUE RECEIVED FROM STAMPS & REGISTRATION

DEPARTMENT (UPTO DECEMBER 1999)

(Rs. In crores)

S.No.

MONTH

TARGET

ACHIEVEMENT

1

April, 1999

72.50

55.58

2

May, 1999

72.50

62.63

3

June, 1999

72.50

66.51

4

July, 1999

50.75

80.33

5

August, 99

50.75

64.00

6

September, 99

43.50

54.98

7

October, 99

43.50

56.02

8

November, 99

50.75

62.36

9

December, 99

50.75

64.57

 

TOTAL

507.50

566.98

Source: Inspector General of Stamps & Registration, Government of Andhra Pradesh, Hyderabad

As seen from the above table, the revenue accrued from Stamps and Registration fees in the state during the year 1999-2000 was highest in July, 1999 ( Rs. 80.33 crores) and it was lowest in September, 1999 ( Rs. 54.98 crores).

STATE EXCISE

State Excise is one of the indirect taxes levied by the State Government. The revenue accrued from State Excise was Rs.443.72 crores in 1994-95. It has declined to Rs.77.66 crores in 1995-96 due to ban on sale of arrack. The ban on scale of liquor is lifted in the State in 1997, since then it has increased to Rs.887.47 crores in 1997-98 and Rs.924 crores in 1998-99.

A look at the gross revenue from State Excise Tax in the State from April to November, 1999, reveal that in June, 1999, the revenue realised from this tax reached a maximum of Rs.114.48 crores as against Rs.87.62 crores in April, 1999, i.e. the beginning of the current financial year. However in May, 1999, it declined to Rs.57.06 crores. It can be seen from the following table.

Table – 8.3

REVENUE REALISED FROM STATE EXCISE

(Rs. In Crores)

YEAR

REVENUE

1996-97

59.14

1997-98

887.47

1998-99

924.00

1999

 

April

87.62

May

57.06

June

114.48

July

83.36

August

90.17

September

93.08

October

83.11

November

89.41

Total:

688.3

Source:Commissioner of Prohibition & Excise, Government of Andhra Pradesh,

Hyderabad.

SALES TAX

It occupies a predominant place in the State’s own Tax Revenue. The total revenue realised through Sales Tax on Top 25 commodities under A.P.G.S.T. is analysed in this chapter The revenue realised through Sales Tax on top 25 Commodities in the State was Rs.3,150.27 crores during 1999-2000 (upto December, 1999) against Rs.2651.79 crores in 1998-99 (upto December, 1998) indicating an increase of 18.8 percent compared to 1998-99. Sale of crude oil increased by 292.26 percent in 1999-2000 followed by Paddy (43.8 percent). Motor vehicles and Motor parts (35.4 percent), Diesel Oil (34.4 percent). Fuel Gas and Other Gases (26 percent), Cosmetics and Toilet Preparation (24.2 percent), Coal (24.2 percent), Aerated Water and Soft Drinks (24 percent) Electronic Systems of all kinds (20.4 percent), Paper of all kinds (20.2 percent), Tyres and Tubes (17.8 percent), Drugs and Medicines (15.2 percent), Soaps (14.6 percent), General goods (14.4 percent), Electrical Goods(14.1 percent) Petrol (13.5 percent), Lubricants (12.2 percent), Liquor (9.9 percent), Chemical Fertilizers and Bone Meal (9.3 percent), Cement (8.4 percent), Iron and Steel (6.6 percent), Pesticides (3.4 percent) respectively. On the other hand the commodities witnessed decrease in the revenue realised upto December, 1999 compared to the corresponding period of previous year that to mainly in Vegetable Oils (10.9 percent) followed by Cotton (6.2 percent) and Tea (2.8 percent) respectively. The top 25 commodities alone contributed 75.8 percent of the total revenue realised in Sales Tax collection upto the end of December,1999, compared to the corresponding period of previous year as can be seen from Annexure – XLVII.

MOTOR VEHICLES TAX

The revenue collected under this tax during the year 1998-99 was Rs.703.45 crores as against Rs.615.85 crore in 1997-98 and thereby showing an increase of 14.2 percent. The revenue realised under Motor Vehicle Tax in the State during 1999-2000 (upto December, 1999) was Rs.533.23 crore. This can be seen from the following table:

Table - 8.4

GROSS REVENUE RECEIPTS OF THE TRANSPORT DEPARTMENT

Rs. in crores.

 

S.No

Details

1997-98

1998-99

1999-2000

(Upto Dec. 1999)

1.

Receipts under I.M.V.Act

46.07

52.38

50.66

2.

Receipts under the State Motor Vehicles Taxation Act.

569.78

651.07

482.57

 

TOTAL:

615.85

703.45

533.23

 

Source:Commissioner of Road Transport Department, Government of Andhra Pradesh

Hyderabad.

The following Table indicate the revenue realised under Motor Vehicle Tax during the year 1999-2000 (upto December, 1999) by Monthwise.

 

Table – 8.5

REVENUE REALISED FROM MOTOR VEHICLE TAX (Rs. in crores)

 

S.NO.

MONTH

RECEIPTS UNDER I.M.V.ACT

RECEIPTS UNDER S.M.V.T ACT.

TOTAL

1.

April, 1999

4.42

74.03

78.45

2.

May, 1999

4.81

48.52

53.33

3.

June, 1999

4.87

29.38

34.25

4.

July, 1999

4.91

40.10

45.01

5.

Aug. 1999

5.43

40.44

45.87

6.

Sept. 1999

5.04

19.80

24.84

7.

Oct. 1999

4.72

50.86

55.58

8.

Nov. 1999

8.66

225.51

334.17

9.

Dec. 1999

8.80

2.21

11.01

 

TOTAL:

50.66

482.57

533.23

Source:Commissioner of Road Transport Department, Government of Andhra Pradesh,

Hyderabad.

A look at the gross revenue from Motor Vehicle Tax in the State from April to December, 1999, reveal that in November, 1999, the revenue accrued from this tax reached a maximum of Rs.334.17 Crores against Rs.78.45 crores in April;,1999, i.e. the beginning of the current financial year. But it dwindled to Rs.11.01 Crores in December, 1999. The total tax collection during the year 1999 (Upto December, 1999) was Rs.533.23 crores.