Financial Daily from THE HINDU group of publications
Monday, Jan 28, 2002
Industry & Economy - Taxation
20% cut in direct tax collection target likely
NEW DELHI, Jan. 27
THE steep decline in corporate tax collections has forced the Finance Ministry to consider an over 20-per cent cut in the budgeted direct tax collection target for 2001-02.
According to officials, the direct tax collection target may be scaled down to around Rs 68,000-70,000 crore in the revised estimate as against the budgeted target of Rs 84,800 crore.
Although the top 10 assessees have paid higher amounts as advance tax, the smaller ones have forked out lower amounts in the third instalment of advance tax. Indications are that such a trend will continue for the fourth instalment, due by March 15.
ONGC topped the list of the top 10 assesses followed by NTPC, SBI and LIC. Telecom PSUs - MTNL and VSNL - coughed up Rs 500 crore and Rs 400 crore respectively from March to December 2000.
The Revenue Department has cited a host of factors - including the economic slowdown and hefty refunds paid both to corporate and income tax assesses - for scaling down the direct tax collection target. Selective scrutiny of returns, also, may have adversely impacted collections, reckon Government sources.
Direct tax collections declined marginally by 0.62 per cent to touch Rs 44,407.99 crore up to December 2001 as compared to Rs 44,686.02 crore in the same period last year. Actual collections stood amounted to roughly half of the targeted collections for the fiscal.
A break-up indicates that the revenues from corporation tax fell by 4.17 per cent to touch Rs 22,776.41 crore as compared to Rs 23,768.11 crore up to December 2000. The cumulative collections amount to just 51 per cent of the budgeted corporate tax collections of Rs 44,200 crore.
Income tax collections, on the other hand, grew by a modest 2.8 per cent and stood at Rs 21,161.03 crore up to December 2001 as against Rs 20,584.34 crore up to December 2000.
The cumulative mop-up works out only to 48 per cent of the budgeted tax collections of Rs 40,600 crore.
The proposed scaling down of the direct tax collection target by around Rs 15,000 crore was yet to be approved by the Finance Minister, Mr Yashwant Sinha, said officials. A similar exercise is under way in indirect tax collection targets as well, where the decline has been steeper.
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