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Govt raises FY12 direct tax collection target by 10%

Govt raises FY12 direct tax collection target by 10%
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First Published: Sat, Aug 20 2011. 12 31 AM IST
Updated: Sat, Aug 20 2011. 12 31 AM IST
Mumbai: The finance ministry has raised the direct tax collection target for the current fiscal (FY12) by 10% to Rs 5.85 trillion from Rs 5.32 trillion, as it seeks to make up what it’s losing because of cuts in petroleum product duties. The new target is 31% higher than the Rs 4.46 crore in direct tax collected in FY11.
A major proportion of the increase has been assigned to Mumbai, as it makes up about 35% of India’s total direct tax collections. The new collection target of Rs 2.04 trillion for India’s commercial hub is difficult to achieve, given the current economic condition, said three senior income-tax (I-T) officials on condition of anonymity.
The target for the Mumbai region has been raised from Rs 1.85 trillion. The direct tax collection in Mumbai last year was Rs 1.53 trillion, in line with the target.
Of the other four regions that raise the most direct tax, Delhi will now have to collect Rs 89,000 crore, Bangalore Rs 52,000 crore, Chennai Rs 38,000 crore and Hyderabad Rs 30,000 crore. Delhi accounts for 15% of the national tax collection, Bangalore 9%, Chennai 6% and Hyderabad 5%.
Out of the Rs 2.04 trillion targeted in Mumbai, the corporate tax collection target is Rs 1.4 trillion, personal income tax Rs 56,000 crore, and securities transaction tax Rs 8,300 crore.
“We have a daunting task ahead of us. The new target set by the ministry looks very difficult to achieve, and if Mumbai misses the target, the overall direct tax collection will go for a toss,” one of the officials said.
According to another of the officials, the recent revision of the tax target is on account of a loss of Rs 29,000 crore to the exchequer due to the reduction in excise duty on the import of petroleum products. The government had cut duty to ease the burden of fuel price increases on consumers after crude oil prices rose.
“At any rate, it is impossible to meet the new target. We are doing our best to prevent tax leakages,” said the third I-T official.
In order to increase the revenue collection this fiscal, the department has already increased its search and survey operations. “The tax deducted at source (TDS) wing of the department has started a special drive to check tax evasion since it contributes about 38% to the overall Mumbai tax collection,” the official added.
In the first six months of FY12, the TDS wing has collected Rs 18,868 crore, up 21% from the same period last year.
However, all-India TDS collections during the period fell 5.43% to Rs 92,404 crore.
The TDS wing of Mumbai’s I-T department has also raised a demand of Rs 15,065 crore from 2,048 companies where a mismatch of TDS has been detected.
Apart from search and survey operations, the department is now focusing on tax arrears locked up in disputes at various levels of litigation. None of the officials could put a number to the amount of money involved.
Last year, the Comptroller and Auditor General of India had stated in its report that the total amount of direct tax locked up in disputes at the commissioner (appeals) level was Rs 2.2 trillion in 2009-10.
“The department has chalked out a plan for quick disposal of pending matters at the level of commissioner (appeals) and the appellate tribunal,” said the first I-T official cited above.
The commissioner (appeals) is the first level of appeal against I-T claims. The tribunal is the next level. Further appeals go to the high courts and the Supreme Court.
khushboo.n@livemint.com
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First Published: Sat, Aug 20 2011. 12 31 AM IST
More Topics: Tax | Direct Tax | TDS | CAG | I-T Claims |