The Hindu Business Line : Tax collections

This is with reference to "Tax collections cross Budget estimates" (Business Line, April 21). Though the increase in direct tax collections is a good sign, the decline in indirect Taxes should be a matter of worry. The major increase in direct taxes is due to increased earnings from capital gains, shares, property, and speculative investments. Another reason for this increase is that people are no longer investing in tax saving instruments since the returns from such investments are no longer lucrative.

But the increasing TDS collections will also lead to more tax refunds by the Income Tax Department. But the worrying point which has resulted in lesser excise Duties/ indirect taxes is that the manufacturing sector remains an underperformer.

The present Customs/excise Duty regime is not motivating the industry to be part of the tax net. The new Government at the Centre will do well to reform the wrong tax regime. A single, simple central VAT for the manufacturing sector is the need of the hour.

Sushil Mehra

Bangalore

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