Indirect tax target challenging but achievable: Arun Jaitley
August, 12th 2014
Finance minister Arun Jaitley said efforts are under way to achieve the indirect tax collection target for the year even though the task is challenging.
Various analysts have questioned the government's revenue assumptions, in particular the indirect tax target, pointing it out as the key risk to attaining the fiscal deficit target of 4.1 per cent of GDP for FY15.
The revenue targets in the case of indirect taxes for the current financial year are challenging but are very much achievable, the finance minister said, according to a statement issued by the Central Board of Excise and Customs (CBEC).
Jaitley addressed the chief commissioners and directors general of customs, central excise and service tax on Monday. The finance minister said the past few years have been somewhat difficult for the economy and as a result, some of the indirect taxes took a hit. In recent months, manufacturing numbers have been very encouraging, Jaitley said.
The minister said the government is in favour of trade facilitation as it leads to a substantial reduction in transactional costs for businesses. On trade facilitation in taxation, he said a large number of irritants that had been created, especially in the tax administration, have been consciously addressed.
He emphasised that trade facilitation will bring in ease of doing business in the country. The finance minister asked senior officers of the CBEC to work as a facilitator for tax payers while at the same time take action wherever they find cases of revenue leakage or tax evasion.
The cost of collecting taxes, both direct and indirect, is not very high and further investment in strengthening the country's tax infrastructure will bring better returns to the exchequer, he said.
The minister also called for reducing tax litigation and a settlement mechanism to unlock money held up due to litigation.
Revenue Secretary Shaktikanta Das said although growth in indirect tax collections in the first quarter was only 4.5%, it was 13.5% in June and the pattern was good in July. Das said a lot of focus has been given towards simplification of procedures, rationalisation measures and ensuring that the department plays a non-adversarial role.
CBEC Chairperson J M Shanti Sundharam said the department with its wealth of experience is confident of its ability to administer the Goods and Services Tax (GST), which is on the government's agenda.