Hyderabad: Recent amendments to the Telangana Value-Added Tax Act to check evasion of commercial taxes are expected to fetch an additional Rs 1,000 crore. The government will adopt the ‘tax deduction at source’ model of the income-tax department to collect tax from traders.

The government has set a sales tax target of Rs 35,000 crore this year. It passed four amendments to the VAT Act to plug tax evasion and leakages in tax collection. Last year, the government could not collect even 60 per cent of the Rs 25,000-crore target.



Various institutions also owe the state Rs 20,000 crore in VAT arrears.

Commercial taxes minister T Srinivas Yadav said the government would directly deduct VAT at the source. “The civil supplies department which procures rice from the millers used to the pay full amount to the mill owners, who were asked to pay 5 per cent VAT. Several millers used to pay partial tax by fudging figures. In the TDS model, the department will deduct 5 per cent VAT before making the payment,” he said.

The Breweries Corporation purchases lakhs of empty liquor bottles from private firms and pays them the full amount. In the new method, the corporation itself will deduct VAT from the dealers and pay the government.