Higher VAT increased revenue generation, says Dy CM
Source: Chronicle News Service

Imphal, August 23 2021: Deputy chief minister and finance in-charge Y Joykumar Singh has said that there is no loss of the state's revenue though not much petroleum products could be sold and assured the state assembly that the government will review prices of petroleum products if necessary.

Replying to a Calling Attention Motion raised by Congress MLA Ak Mirabai Devi on reported loss of revenue of the state due to higher VAT levied in comparison to neighbouring states and reduction in sale of petroleum products this year than in previous year, Joykumar clarified that the state government has been considering ways to minimize the prices of petroleum products in view of the current pandemic situation.

While admitting that some neighbouring states levy lower VAT on petroleum products, the deputy CM said that states like Assam, Meghalaya and Nagaland have greater Revenue Deficit Grants (RDG) than Manipur and therefore these states can reduce VAT on petroleum products.

Moreover, these states have adequate revenue resources other than petroleum products for revenue generation contrary to which in Manipur VAT has been an important source of revenue generation.

Although the state has been facing a tight financial situation, steps will be taken up to rejuvenate financial resources, he added.

Raising the Motion, Ak Mirabai, quoting reports published in local dailies, said the state lost Rs 49.34 crore in the financial year 2019-20 as petroleum products could not be sold much due to higher VAT.

She also suggested reduction of VAT comparable with neighbouring states so that sale of petroleum products could enhance state's revenue.

This will also help in bringing down the prices of essential commodities, she opined.

Giving broad reason for reduction in sale of petroleum products, Ak Mirabai said that trucks plying along national highways both belonging to the state and those coming from outside do not refuel in Manipur due to higher price compared to Assam, Nagaland and Meghalaya.

Apart from this, large quantity of fuel for trucks utilised for mega projects in the state is procured from the neighbouring states, she said and strongly called for reducing VAT so that petroleum products could be sold at prices comparable with neighbouring states.

After patient hearing of the Motion, Joykumar admitted to reduction in sell of petroleum products in the state this time in comparison to previous year but flatly denied newspaper reports that the state lost Rs 49.34 crore in the financial year 2019-20 .

Terming the reports as baseless, Y Joykumar said that the state might not have sold much petroleum products but generated higher revenue than the previous year due to high VAT.

He made it clear that the state could collect only Rs 80.77 crore as revenue for selling diesel in the year 2019-20 due to low VAT but the receipt was Rs 156.41 crore in the year 2020-21 due to higher VAT.

In the case of petrol too, revenue collection increased from Rs 98.86 crore in the year 2019-20 to Rs 141.47 crore in the year 2021 due to higher VAT, he added.

According to Y Joykumar, COVID-19 induced lock-down is the main reason for reduction in sale of petroleum products in the state and not by reduction of petroleum prices in neighbouring states.

He maintained that trucks do not depend on price for refuelling but make the purchase at the convenience of the drivers concerned.

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