As just four days are left to close the current financial year (2018-19), pressure is mounting on tax officials to meet revenue collection target.
Raising concerns over the “alarming situation” of direct tax collection--direct tax receipts are just 85 per cent of the full year estimate--, the Central Board of Direct Taxes (CBDT) has asked its officials to pay “immediate attention” on measures to shore up revenues.
“You must... take all possible actions urgently, especially with respect to recovery of arrears and current demand, so as to achieve the targets for collection,” CBDT Member Neena Kumar said in a letter to all Principal Chief Commissioners of Income Tax.
According to the internal estimate of the department, against the budget target of ₹12 lakh crore, only ₹10,21,251 crore (85.1 per cent of target) has been collected as on March 23.
A worsening trend
An analysis of tax collection under the minor head indicates a worsening trend of negative growth in regular collection-- a decline of 6.9 per cent against a decline of 5.2 per cent in the last week--, the CBDT Member noted.
Taxes such as advance tax, TDS, self-assessment tax, presumptive tax, tax under the black money of undisclosed foreign income and TDS on sale of the property are grouped under minor head.
A senior I-T officer told BusinessLine that some corporate taxpayers are bunching their payment of taxes under self-assessment tax and paying the amount only after the due date along with a penalty. Therefore, IT Commissioners are calling up all such large corporate taxpayers so that they can boost the revenue collected under the minor head.
Shortfall in GST mop-up
There are already concerns that there will be a shortfall in the Goods and Services Tax collection, the projection for which had been lowered to ₹11.47 lakh crore in the revised estimates for 2018-19. It was originally budgeted at ₹13.71 lakh crore for the fiscal.
The revised estimate for direct tax collection for 2018-19 was increased by ₹50,000 crore from the budget estimate of ₹11.50 lakh crore. This was primarily in the corporate tax collection target. The Centre had just about met its direct tax collection target in 2017-18 with the actual mop-up at ₹10.02 lakh crore.
This is also essential for the Centre to meet its fiscal deficit target of 3.4 per cent for 2018-19.
Economic Affairs Secretary Subhash Chandra Garg had recently said that the government is reasonably confident of meeting direct tax target. “There may be some shortfall in indirect taxes but we will make it up by savings,” he had told reporters, stressing that the 3.4 per cent target is “safe”.