I-T seeks advance tax from Ahmedabad corporates

The Income Tax department has been asking corporates in Ahmedabad to pay advance income tax to meet its revenue targets.

While some corporates have paid up "to maintain cordial relations" with the department, others have declined the offer. This was one of the issues raised at the Gujarat Chamber of Commerce and Industry's recent open house on income tax issues.

Chief Commissioner of Income Tax, Ahmedabad, N K Jain, attended the session. "These were more of requests than directions and were made with the sole intention of meeting targets, that are revised upward every year," said Kaushik Shah, chairman of the taxes committee of the GCCI.

GCCI officials said that, during informal talks with officials of the IT department, they were given to understand that every year the central government informally asks the member, Central Board of Direct Taxes (CBDT), to meet revenue targets before the financial year ends. The CBDT, in turn, passes the message to the IT commissioners.

"The problem is that the official making the request and the refunding officials are different and refunds are not made in March," said a GCCI office bearer.

According to Shah, the top ten corporates of Ahmedabad were requested to pay advance taxes by the department. He hinted that this could have been repeated in other cities across the state as well.

"As far as I know, while pharma major Torrent and the Adani group did not pay advance income tax, citing various reasons, Gruh Finance and Gujarat Mineral Development Corporation (GMDC) did pay advance tax," he said.

"Yes, there were a few casual complaints that, in view of the shortfall of targets, the department had asked a few tax payers in the higher bracket to pay advance tax. But this was not a serious issue. While it is not ethical, it does not appear to be unethical as well, because the amount is to be refunded," said GCCI president Shreyas Pandya.

According to figures provided by the department, until February 15, 63 per cent of the IT revenues target was achieved in the state, which was far below expectations. The IT revenue target for Gujarat this fiscal has been pegged at Rs 4275 crore.

In comparison, as on February 15, 2004, the all-India IT collection had been 69 per cent of the target. The all-India target of IT collection has been put at Rs 1.03 lakh crore for this fiscal.