The rising revenue collection in the Union Territory has witnessed a sudden fall in the last one month due to a cash crunch following the ban on higher denomination currencies.
The Commercial Tax Department, the key contributor to the coffers of the territorial administration, had recorded a steady rise in revenue collection from the beginning of the current fiscal, but it took a downward spiral in November and it continues to be so this month.
The revenue collection nosedived from Rs. 141 crore in October to Rs. 131 crore in November. “The dip in commercial activities post demonetisation have hit the revenue collection very badly. This happened at a time when the collection was showing encouraging signs from April. There was a marginal increase every month from April and it suddenly fell in November. The trend is likely to continue this month,” a senior government official told The Hindu.
The Excise Department too witnessed a shortfall in collections in November compared to the previous month. While the department collected a sum of Rs. 52 crore in October, it managed only Rs. 46 crore in November.
The concern for the government, according to a senior official, was not the dip in commercial tax and excise duty collections, as it could recover as and when the cash crunch eases. What is worrisome for the government is falling revenue from registration of properties.
As the third biggest revenue earner after the Commercial Taxes Department and Excise, the Revenue Department had been facing a slump in stamp duty collection due to fall in registration of properties during the last two financial years.
Stamp duty collection
Notwithstanding the slump in stamp duty collection, the government in August reduced the guideline registration (GLR) value of property by 25 per cent as a measure to increase the volume of registration.
While stamp duty collection was around Rs 7 crore in September-October, the earnings from registration of property came down to around Rs 4 crore post-demonetisation.
In the previous two years, the monthly revenue collection from stamp duty was around Rs 10 to Rs 12 crore. The Revenue Department had collected Rs 117 crore during last financial year. The department expects a 50 per cent dip in revenue collection this year, sources said.
For a cash starved UT, the dip in revenue would add further to its financial woes.
