Direct tax collection target raised by Rs 20,000 cr to Rs 10 lakh cr

Mumbai, Delhi I-T dept asked to shore up collection by Rs 10,000 cr each

Even as the Central Board of Direct Taxes (CBDT) finds it difficult to achieve the Budget Estimates (BE) of direct taxes at Rs 9.8 lakh crore for FY18, its target was revised upwards by Rs 20,000 crore to Rs 10 lakh crore.

Sources in the apex body say the government was expecting a shortfall in indirect tax collections after the implementation of goods and services tax (GST).  

In an internal meeting held last week, the CBDT asked income-tax (I-T) departments of Mumbai and Delhi to contribute an additional Rs 10,000 crore each to bridge the gap, said a senior I-T official privy to the development.

An internal circular of the revised target is expected to be sent out by CBDT shortly.

 

Sources said that the finance ministry had asked CBDT to take strong measures to shore up revenue.

The move comes at a time when the I-T department is already grappling with direct tax collection target of Rs 9.8 lakh crore and reportedly pitched central government to reduce the same.

“This is the part of the measures to keep fiscal deficit math in check and also to compensate for the shortfall due to the change in the regime of indirect tax structure,” said the official cited above.

This move is likely to have been triggered by poor collection under the GST at Rs 83,346 crore for October, the lowest monthly collection since the change in the indirect tax regime from July 1.

Sources say that collections for November could be even lower, as the rates of over 200 items were reduced in October.

Subsequently, the government’s fiscal deficit numbers have taken a back seat. According to official data, the fiscal deficit stood at Rs 5.25 lakh crore during April-October – 96 per cent of the full-year target.

An email and text messages sent to Revenue Secretary Hasmukh Adhia went unanswered.

Sources say that to achieve the new tax collection target, the CBDT laid out an action plan and directed tax officials to begin the process immediately.

According to a tax officer, the action plan directs tax officers to go after tax evaders aggressively using all the applicable laws. CBDT asked tax officials to attach property/assets of tax evaders, and fast track the auction of the property wherever applicable. “Recovery related surveys have come down significantly. So far, no asset/property has been auctioned by tax recovery officers despite raising the tax demand,” said another tax officer.

Further, he said, taxmen were told to invoke Section 276C (2), which is wilful attempt to evade payment of tax in actionable cases.

CBDT also directed I-T officers to invoke the provisions of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. This allows the tax officer to “attach and confiscate” black money holders’ Indian assets. Further, they were directed to identify and pursue more cases under Benami Transactions (Prohibition) Act, which could help them nabbing the domestic tax evaders.

Among other key measures, CBDT is said to have clearly instructed taxmen to conduct extensive survey operations, under Operation Clean Money, an exercise launched by the tax department post demonetisation to check on black money menace. Other measures include scrutinising those entities that have delayed/missed the tax-deducted-at-source (TDS) payment in the current fiscal year. TDS growth in the first half was around 10.44 per cent, against 17 per cent reported in the year-ago period.

Tax officers were also asked to recover tax arrears pending for the last three fiscals. Data suggest that only 25 per cent has been collected so far from the total annual revenue collection. Similarly, the tax department achieved only 1.5 per cent of revenue demand raised against the overall target of 20 per cent.

Though gross direct tax collection was up by 14.4 per cent in the April-November 2017 period at Rs 4.8 lakh crore, it accounts for less than half of the BE of Rs 9.8 lakh crore. 

The government issued refunds of Rs 1.02 lakh crore between April and November 2017.\

BUTTRESSING REVENUE

• Direct tax collection up to November stood at Rs 4.8 lakh crore

• Tax department target for FY18 is Rs 9.8 lakh crore

• Centre earned less than half of its full-year target

• GST collection slowed down to Rs 83,346 crore for October

• Fiscal deficit stood at Rs 5.25 lakh crore during April-October

• Mumbai, Delhi tax departments asked to add Rs 20,000 crore more