Delhi govt. expects highest share of tax revenue from alcohol in FY20

 thehindu.com  12/05/2019 00:33:24  2

The Arvind Kejriwal government in Delhi is expecting more than 14% of its tax revenue in the current financial year to come from the excise duty on alcohol in the State. This would be the highest share of tax revenue from this category during this governments term.

An analysis of Delhis budget documents shows that it is expecting 5,980 crore from the excise duty on countrymade as well as foreign liquor in 2019-20, which works out to 14.1% of the 42,500 crore of tax revenue the government hopes to collect over the year.

This 14.1% share in tax revenue will be the highest contribution from alcohol over the course of this governments term. Alcohol contributed 12.8% to tax revenue in financial year 2014-15, which grew for two years before dipping briefly in 2017-18, and then rising again in 2018-19 and 2019-20.

The analysis shows that alcohol is one of the few major contributors to tax revenue that has seen its share change in any significant way over the last three years. The other major contributors  stamps and registration fees, and taxes on vehicles  saw changes of less than one percentage point in their shares to total tax revenue.

The largest contributor to the States tax revenue has been the GST, with State GST expected to make up 53.2% of the tax revenue earned in 2019-20. This is up from 38.1% in 2017-18, the first year of GST.

Grants-in-aid dipped

The government of Delhi has maintained a revenue surplus since 2013-14, a point highlighted by the Comptroller and Auditor General (CAG) recently. Notably, the CAG pointed out that this was despite the fact that Grants-in-Aid from the Central government have decreased.

The grants-in-aid from government of India decreased from 2,825 crore [2016-17] to 2,184 crore [2017-18], the report said.

This included grants from government of India in lieu of share in Central taxes which has remained stagnant at 325 crore since 2001-02 although the Central tax collections have grown substantially since 2001-02.

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