Tamil Nadu

T.N.’s tax revenue up 11.4% in Nov. 2020

Tamil Nadu’s Own Tax Revenue increased 11.4% to ₹9,526.38 crore in November 2020 from ₹8,549.43 crore in the same period of 2019, according to the provisional figures from the Comptroller and Auditor-General (CAG).

In a sign of recovery, the State has posted a double digit growth for the second straight month in its own tax revenue. In October 2020, the State’s Own Tax Revenue (SOTR) increased about 18.8% to ₹9,475.16 crore from ₹7,976.53 in the comparable period last year.

70% of the total

The SOTR comes from stamp duty and registration, value-added tax on petrol and diesel, excise duty on liquor, motor vehicle tax and States Goods and Services Tax. The SOTR accounts for 70% of Tamil Nadu’s total revenue.

Amid the intense lockdown to curb COVID-19, the SOTR declined 74.29% in April and 67% in May 2020, compared with last year. In June, the SOTR dropped 8.9% and recovered in July with a positive growth of 8%. In August again, the SOTR declined 21.44% and then posted a 7% growth in September.

The growth in November 2020 was led by State excise duties (which reflect liquor revenues). They increased 31.3% to ₹750.78 crore, compared with ₹571.97 crore in November 2019.

The taxes on sales and trade, another component of the SOTR, increased 16.3% to ₹4,334.69 crore in November 2020 from ₹3,728.48 crore in the same period last year. The growth in this component also reflects a rebound in petrol and diesel demand.

The revenue from stamps and registration fees increased 10.7% to ₹1,091.32 crore in November 2020 from ₹986.21 crore in the same period of 2019.

The State Goods and Services Tax grew 2.7% to ₹3,326.92 crore in November 2020 from ₹3,240.79 crore, while land revenue increased 3.1% to ₹22.67 crore from ₹21.98 crore.

Real challenge

While the SOTR is showing signs of recovery, the real challenge is from the increasing expenditure to tackle COVID-19. Until November in the fiscal year 2020-21, the total expenditure stood at ₹1,39,879.55 crore, while the total receipts stood at ₹1,02,630.52 crore. This results in a fiscal deficit (the difference between total revenue and expenditure, excluding borrowings) of about ₹37,249.04 crore.

Revenue deficit stood at ₹28,767.35 crore as of November. Revenue deficit is the difference between the government’s revenue receipts and revenue expenditure and shows that the government’s earnings are not adequate to meet its daily expenses.

Tamil Nadu has so far borrowed ₹67,000 crore from the market in 2020-21, up 30% from ₹51,390 crore in the same period last year.

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Printable version | Feb 28, 2021 11:53:08 AM | https://www.thehindu.com/news/national/tamil-nadu/tns-tax-revenue-up-114-in-nov-2020/article33604643.ece

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