Direct tax kitty swells in April-May as refunds dip
June, 14th 2012
Aided by a sharp decline in refund outgo, the Centre's net direct tax collection surged 172.64 per cent in AprilMay to Rs 35,323 crore against Rs 12,956 crore in April-May last year.
Refund outgo declined 54.85 per cent in the first two months of the current fiscal, official data released on Wednesday showed.
The Centre is looking to rein-in refunds this fiscal as part of its overall strategy to achieve the Budget Estimate of Rs 5.70 lakh crore.
The Finance Secretary, Mr R.S.Gujral, had, at the just concluded annual conference of IT Chief Commissioners, said that the refund outgo this fiscal will be lower than the Rs 95,000 crore paid out last fiscal. Direct tax collections have been growing at a scorching pace since the mid-1990s, thanks to the Government's policy to persist with stable and moderate tax rates.
Direct tax revenues have grown 15 times in the last 15 years.
It is only in the latest Budget that the Government again tried to tilt the balance in favour of indirect taxes for mopping up additional revenues.
The Centre aims to mobilise direct taxes of Rs 5.70 lakh crore in 2012-13. This reflects a 15 per cent increase over the actual collections of Rs 4.95 lakh crore in 2011-12.
In the first two months of the current fiscal, gross direct tax collections was up 3.62 per cent at Rs 52,232 crore (Rs 50,407 crore).
While gross corporate tax collection showed a decline of 2.82 per cent at Rs 24,329 crore (Rs 25,035 crore), gross collection of personal income tax was up by 10.02 per cent at Rs 27,884 crore (Rs 25,344 crore).
The other goods news is that securities transaction tax (STT) has registered a turnaround in the first two months. In April-May, STT collections recorded 7.36 per cent growth to Rs 540 crore (Rs 503 crore). STT collections had declined 20.95 per cent in 2011-12 to Rs 5,656 crore (Rs 7,155 crore).
However, wealth tax collections were down 16.67 per cent in April May to Rs 15 crore (Rs 18 crore).
The Finance Minister, Mr Pranab Mukherjee, had recently said that the direct tax collections target of Rs 5.70 lakh crore for 2012-13 was achievable even in the current environment of economic slowdown. The Central Statistics Office had recently lowered the economic growth estimate for 2011-12 to 6.5 per cent from an advance estimate of 6.9 per cent.
The Finance Ministry has already chalked out a strategy for achieving the direct taxes target. The Chief Commissioners of Income Tax have been asked to focus on sectors that are likely to do well in current fiscal.
The sectors identified are consumer goods, software, two-wheelers, cement, infrastructure, auto four-wheelers, pharma, oil marketing companies and some banks.