Delhi‘s earnings through motor vehicle tax and goods and services tax in the first six months of the 2024-25 financial year tax revenue were not very “encouraging”, sources in govt said.
While the collection from motor vehicle tax and registration fee decreased by INR 1 crore between April 1 and Sept 30 in the current fiscal year compared with the same period in the 2023-24 financial year, the earnings from GST and VAT saw a marginal increase of about 6.4%. Sources said efforts were being made by govt to improve the collection in the remaining six months. In first two quarters of 2023-24, GST and MV tax had registered a growth of 16.8% and 10.8%, respectively, in comparison to the same period in the preceding financial year.
While GST and VAT are Delhi govt‘s mainstay of tax revenue and contribute nearly 70% of the total collection, taxes on motor vehicles and registration fees are also an important component. Delhi govt collected INR 53,680 crore as tax revenue through GST and VAT, MV tax, excise on liquor, and stamp and registration fees in the 2023-24 financial year. While presenting the budget for 2024-25, it projected a total tax revenue collection of INR 58,750 crore in 2024-25. Sources said the collection in two other categories was satisfactory, but the fall in GST and VAT and MV Tax was indeed alarming.
In the first two quarters of the current fiscal year, Delhi govt collected INR 1,404 crore as MV tax against INR 1,405 crore earned during the same period in the last financial year. It registered a decline in three months – May, Aug and Sept – compared with the preceding fiscal year, while it was the same as last year in the month of June. The MV tax collection was more in April and July this year compared with 2023.
“The revenue earned in the month of Sept was abysmally low, with just INR 182 crore coming into govt’s kitty. But that was probably because of the 15-day period of ‘shraadh,’ which is considered inauspicious by some, and they don’t buy new vehicles during that month,” said an official, adding that the situation improved in Oct. Till Oct 26, Delhi govt managed to earn INR 282 crore as MV Tax.
Through GST and VAT, Delhi govt earned INR 21,439 crore in the first six months of 2024-25, which is only 6.4% more than INR 20,179 crore collected last year during the same period. The current fiscal year started on a good note, with govt mopping up INR 4,719 crore in April compared with INR 3,887 crore collected during the same month last year.
The period of May, June, and July, however, was not as good, and the increase in GST and VAT collection during these three months was only 3.6%, 6.6%, and 2.6% more, respectively, compared with last year. With INR 363 crore received as GST compensation from the Centre, the collection was almost 29% more in Aug 2024 compared with the same month last year. It, however, fell by almost 20% in Sept since govt received INR 1,137 crore compensation during the same month in 2023.
Delhi govt has projected a revenue collection of INR 41,000 crore through GST and VAT and INR 3,600 crore as MV tax in 2024-25.
