Tuesday 25 September 2018

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Economy | Finance

VDIS suffers, but Goa excels in IT collections

 

VDIS fared badly in Goa, not because the local income tax department took no efforts but mainly because it otherwise fares well over national average in terms of routine tax collections.

The biggest advantage Goans are having is the Portuguese Civil Code, which is still in force here, 36 years after its liberation. Since 1994, the Income Tax Act has also taken cognisance of it, to asses the family assets, which are equally divided among all the family members.

Obviously, after getting benefit of exemption slabs, they have to pay very little towards the income tax for the share of their property, defined as per the Communion de Bens. When Section 5 of the Income Tax Act was amended,

The mining industry, backbone of Goan economy, also gets income tax exemptions in sale proceeds of iron ore exports under FOREX guidelines, as per section 80 HHC of the ITA.

The tourist state is being industrialised recently, because the five-year tax holiday is the main attraction for several multinationals and other domestic industries here. Ultimately who remains are the businessmen, hoteliers and the builders, besides the salaried middle class.

The response has thus been mainly from the small and big businessmen including small hotel owners and wholesale dealers in cash, from goldsmith in stocks, from middle class families in terms of jewellery and silver and very few builders.

Though the IT officials here expected equally good response from the builders, perhaps the crash in real estate market and liquidity crunch kept them away from declarations. Equally strong fishing industry surprisingly is totally missing in the list.

Besides people owning cell phones, which is a recent craze in the tourist state, the local income tax department now plans to crack down upon the investors in the real estate, as most of the Gulf-based Goans and businessmen from the neighbouring states and Mumbai learnt to have invested black money into it here.

Collections at Goa office are quite impressive otherwise, around Rs 65 crore with 3600 declarations for an income of around Rs 205 crore. But hardly one third of it is Goa's collection.

The IT office here also controls three districts of the neighbouring Karnataka state - North Canara, Belgaum and Bijapur, coming under Belgaum range.

The official figures indicate 414 disclosures from Belgaum range while only 78 from Goa, till November end. The response was more at end December, but in a similar proportion.

According to Shyamsunder Keshkamat, assistant director of investigations branch, Goa has been topping the list in terms of normal tax collections. Against the national average of less than one per cent, the collections here are over five per cent, he states.

The normal collection in Goa last year was Rs 145 crore, compared to only Rs 30 crore from the Belgaum range. This is despite a fact that the size of each of the three districts in Karnataka is more than double of the whole state of Goa.






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