FM raises tax collection targets for current financial year
January, 24th 2011
The Finance Minister, Mr Pranab Mukherjee, on Sunday raised the direct and indirect tax collections targets for current financial year, indicating that the Government was keen on consolidating its finances.
Addressing a review meeting of CBDT and CBEC in Chennai, the Minister said that direct tax collection target is been raised by 4 per cent over the budget estimate.
This would imply that the direct taxes collection target for 2010-11 will now stand at Rs 4.47 lakh crore as against a budget estimate of Rs 4.3 lakh crore.
Mr Mukherjee has also raised the indirect tax collection target for 2010-11 by 7 per cent. This would imply that the indirect tax collection target for 2010-11 would be Rs 3.37 lakh crore as against the earlier BE level of Rs 3.15 lakh crore.
Both direct and indirect tax collection have been buoyant this year on the back of strong economic growth which is expected to be around 8.75 per cent this fiscal.
The revised targets will not be a big ask on the Revenue Department, given the growth in tax receipt this fiscal, economy watchers said.
The move to revise the revenue targets is also seen as an effort to maintain the tax-GDP ratio of the country.
The strengthening of international crude oil prices as well as other commodity prices including metals have bolstered the Centres customs duty collection this year. The Finance Minister, however, asked Revenue Department officials to focus attention on increasing service tax collections. He pointed out that while the service's sector has grown enormously, the rise in service tax collection was not commensurate.
The Centre had budgeted a sum of Rs 68,000 crore as service tax collection target for 2010-11. In April-December 2010, the Centre had collected service tax to the tune of Rs 44,081 crore, reflecting a 19.2 per cent increase over Rs 36,984 crore collected in the same period in the previous year.