Finance Minister P Chidambaram is to have a review meeting with officers of the Central Board of Direct Taxes (CBDT) on Monday.
This comes in the wake of muted direct tax collections and the Kelkar panel stating Budget 2012-13 had overestimated the tax target for this financial year.
Officials are working hard to prepare themselves for the meeting with the minister, known to have an eye for detail. Chidambaram took a similar meeting with officials from the Central Board of Excise & Customs on Friday.
So far this financial year, direct tax collections have been subdued, owing to sluggish economic and industrial growth. Gross direct tax collections increased just 6.5 per cent to Rs 164,413 crore in April-August, against Rs 154,361 crore in the same period a year before. The muted growth could also be attributed to low corporate tax collections in these five months.
The minister is likely on Monday to assess the revenue situation and discuss ways to meet the Budget estimate on direct tax collection, of Rs 5.7 lakh crore this financial year.
The meeting also assumes significance in the backdrop of the Shome panel report on the General Anti-Avoidance Rules (GAAR) and retrospective taxation of indirect transfer of Indian assets. The latter report is likely to be made public shortly, for comments. Earlier this week, the minister had said the report would be released as soon as it was examined by the ministry. Based on the panel's GAAR report, the finance ministry will make changes to the guidelines. The report has proposed deferring the rules by three years.
In a report released last month, the Vijay Kelkar committee had recommended the government prune its subsidies, check Plan expenditure, raise at least Rs 30,000 crore through disinvestment this financial year and shore up the tax-gross domestic product ratio to ensure the Centre’s fiscal deficit could be reined in at 5.2 per cent of GDP this year. Else, it warned, the deficit could total 6.1 per cent of GDP, against the Budget estimate of 5.1 per cent. The Budget, it said, had overestimated tax receipts by Rs 60,000 crore and underestimated subsidies by Rs 70,000 crore.
CBDT chairperson Poonam Kishore Saxena, all members of the board, joint secretaries, and the director general of income tax (systems) would attend the Monday meeting. All these officials, with their juniors, have been asked to come to work on Sunday.