Trends in Collection of Value Added Tax in West Bengal: A Commentary

Abstract

As per constitutional provisions of Indian federal finance, value added tax (VAT) (and sales tax) is the main source of revenue for the state government. Value added tax (including sales tax) collected by the Directorate of Commercial Taxes, West Bengal, accounts for approximately 62 per cent of state’s own tax revenue (SOTR). Studies on collection of taxes suggest that revenue from all taxes not only depends directly on the nature and growth of the tax base but depends also on other factors such as economic reforms, global and national economic condition and tax effort of the tax collecting department. The motivation of this article is to try to analyze the nature of the trends in collection of VAT in West Bengal during recent years and to find out the effect of different explanatory variables on collection of VAT. JEL Classification: H26, H71, H3

Analysing the Impact of GST on Tax Revenue in India: The Tax Buoyancy Approach

“…In India, states are earning approximately 60 to 65 per cent of state's own tax revenue (SOTR) from indirect taxes. Tax collection largely depends on the nature and growth of the tax base but also on the improved effort of the tax collection (Dwivedi & Sinha, 2017).In 2005, GOI initiated VAT (Value Added Tax) with the consultation of the states to reduce the double taxation, multiplicity of rates, tax competition between states and central agencies (Nepram, 2011).…”