Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Direct Tax »
Open DEMAT Account in 24 hrs
 Income tax exemption: 4 financial instruments you can still invest into before March 31
 CBDT drops small tax demands but not TCS, TDS claims
 ITR Refund: Awaiting money from Income Tax? Here's why you have not yet received your amount
 Income Tax Notice: What to do if you receive a Section 143 (1) notice from taxman?
 Average tax return processing time cut to 10 days: CBDT
 7 types of Income Tax Notice ITR filers may receive for AY 2023-24
 ITR filing: Do these advance preparations before filing your income tax return
 What are the strategies to maximize tax refunds after submitting an income tax return (ITR)?
 ITR filing: Tax rules on income from house property that your should know
 CBDT likely to issue rules on angel tax next week
 Pension Taxation: Everything you need to know for ITR filing

FinMin worried over tax mop -up
October, 18th 2013

After getting some comfort on the current account deficit with a rise in exports, the finance ministry is now worried about revenue, crucial for containing the fiscal deficit at 4.8 per cent of gross domestic product, its outer target.

As tax collections were subdued in the first half of the financial year, it has planned to issue instructions to field officers to take all possible measures to meet their Budget target.

The revenue department’s worry is that in many cases taxpayers have taken credit for the tax already paid by them on inputs, thus reducing their net cash outgo. The Central Board of Excise and Customs (CBEC) might ask field officers to do a special audit in such cases.

Finance Minister P Chidambaram will soon brainstorm with top revenue officials on what to do. The CBEC brass is to meet on Friday in this regard. Besides special audits, other measures could include notices to non-filers and stop-filers, recovery of arrears and fast settlement of disputes, among others.

“This time, the tax credit has been more than cash payment. It could be because of expansion by companies, particularly in capital-intensive sectors, but this might not be true in all the cases. We are trying to figure out why this happened,” said a ministry official who did not wish to be identified.

The official said the ratio of tax credit to cash payment was 35:65 a decade earlier; now, this had reversed. Tax credit of about Rs 2.5 lakh crore was given last year. So far this year, tax credit of Rs 1,72,000 crore has been taken, while cash payments are Rs 62,107 crore.

The growth in tax receipts during the first half of this year has been lower than the 19 per cent projected in the Budget for the entire year, as GDP growth is less than expected.

Indirect taxes are particularly bothering the government, as excise collections till August were 8.3 per cent down due to weak industrial output, against the Budget Estimate of 11.9 per cent growth for the year. Service tax collections, though up, have also grown at a much lesser pace of 14.3 per cent against the asking rate of 36 per cent.

Collection from customs duty during April-August recorded 9.6 per cent growth over the same period of last year. This is lower than the Budget projection of 13 per cent for 2013-14.

Officials said in September some pick-up was seen, as industrial output grew by 2.7 per cent in July and 0.6 per cent in August. There is a lag effect of one to two months between the two sets of data.

The ministry is expecting collections to pick up in the coming months, led by a growth in industrial output in July and August after a two-month contraction, stimulus to the automobile and consumer durables sector by way of additional capital to banks and higher GDP growth in the last two quarters.

Another silver lining is the coming Assembly elections in five states, which would increase fuel consumption.

Net direct tax collections in April-September were up 10.7 per cent at Rs 250,959 crore, compared with Rs 226,653 crore in the same period of 2012-13.

The government has set a target of Rs 668,109 crore for direct taxes this year, against the BE of Rs 570,257 crore last year. For indirect taxes, the target is Rs 565,002 crore in 2013-14, against last year’s BE of Rs 505,044 crore. In 2012-13, both direct and indirect tax collections fell short of the target and the Revised Estimate was set at Rs 565,835 crore and Rs 469,546 crore, respectively, a rise of 17.4 per cent over the previous year.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting