Industry & Economy
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Taxation
Tax sops, rebates cost Govt over Rs 2.35 lakh cr
Our Bureau
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New Delhi
March 1
How much do special tax rates, exemptions, deductions, rebates, deferrals and credits cost the exchequer? About Rs 235,191 crore or over 50 per cent of the Centre's gross tax revenues of Rs 467,848 crore as per the revised estimates for 2006-07.
According to the Finance Ministry's latest `revenue foregone' statement forming part of the 2007-08 Receipts Budget document, the major loss of revenue due to the `effective' tax rates turning out lower than the `statutory' rates is from excise, at Rs 99,690 crore. This figure includes the Rs 7,000 crore foregone on account of area-based exemptions given to units in Uttaranchal, Himachal Pradesh, Kutch (Gujarat), Jammu & Kashmir and the North-Eastern States.
In customs, the revenue foregone amount is even higher at Rs 123,682 crore. But since this includes input tax credits made available to exporters of Rs 53,768 crore against advance licence, export-oriented units, Export Promotion Capital Good and related schemes, the net revenue loss is lower.
In direct taxes, the revenue foregone on corporate profits — factoring in the difference between the official rate of 33.66 per cent and an effective rate of 19.26 per cent on account of various concessions — comes to Rs 50,075 crore. The same for individual tax assessees works out to Rs 15,512 crore, including Rs 3,260 crore and Rs 1,712 crore due to higher exemption limits on senior citizens and women, respectively.
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