At 3.1 lakh cr, direct tax windfall set to surpass revised target

Customs Mopup Set To Exceed Revised Estimate Of Rs 1,00,766 Cr Service Tax Collections To Hit Revised Target Of Rs 50,603 Cr

The surge in direct tax collections is sure to give comfort to finance minister P Chidambaram. The government’s 2007-08 direct tax collections are set to cross the revised target of Rs 3,05,000 crore to touch Rs 3,10,000 crore.

Riding on the back of buoyancy, both in corporate and personal income-tax, the government had revised the direct tax collection target from Rs 2,67,490 crore to Rs 3,05,000 crore. An official said the direct tax collections had exceeded the revised estimates and the final figure could well be over Rs 3,10,000 crore. The final data will be available only by the month-end since the data gets collated at controllergeneral of accounts.

The additional revenue will not only help in the government in meeting its additional expenditure of over Rs 40,000 crore in 2007-08, but also in meeting the revenue and fiscal deficit targets.

On the indirect tax front, the government may just manage to meet the revised target. On the Customs front, it is all set to exceed the higher revised estimate of Rs 1,00,766 crore. The budget estimate for Customs collections was Rs 98,770 crore.

In the case of excise where the estimate was revised downwards from Rs 1,30,220 crore to Rs 1,27,947 crore, the situation doesn’t look very bright.

On service tax front, the government is expected to meet the revised service tax target of Rs 50,603 crore.

The buoyancy in government’s direct tax collections has been all encompassing. Even the share of tax deducted at source has increased to 35% from 28% in the last fiscal. But, this is more so because of the emphasis given by the income-tax department on TDS. Regular assessment would also yield close to Rs.5000 crore to Rs.7000 crore, it is estimated.

At the end of February, the direct taxes, including corporate tax and personal income tax, grew by over 40% and stood at Rs 2,32,676 crore. The advance tax collections from the corporate sector and personal income-tax also grew by 40%.