The finance ministry expects to surpass the Union government’s revised estimate of Rs 2,44,477 crore in indirect tax collection by at least Rs 4,000-crore for the current fiscal.
According to sources, the government has raised about 90 per cent of the revised estimate for tax collections till Friday morning and the situation appears comfortable even as the proceeds from disinvestment fall short by about Rs 1,500-1,000 crore.
The most important reason for the indirect tax collections to exceed the revised target is that the government did not consider the increased cenvat and customs duty rates while giving the revised estimates in the budget presented on February 26, said a senior finance ministry official who did not wish to be identified. Besides, the industrial growth has been in double digits for the fifth consecutive month.
Petroleum duty changes alone, make up more than Rs 2,000 crore of the the government’s earning during March, 2010. The revenue department has already collected Rs 2,09,780 crore as against a revised target of Rs 2,44,477 crore for indirect collections. The revenue department will get another Rs 1,477 crore as cess from the other departments of the Union government, said an official.
When contacted, revenue secretary Sunil Mitra told Business Standard, “As of today morning, collections (both direct and indirect) are 89 per cent of the revised target for 2009-10.” He did not give further details.
Another official said the collections stood at Rs 5,58,872 crore till the end of March 18 compared to a revised estimate of Rs 6,33,095 crore. This leaves the revenue department with just Rs 74,223 crore to be raised during the remaining 13 days.
Indirect tax is usually deposited at the end of a month, so the government is comfortable. Besides, the direct tax collection figure that stood at around Rs 3,49,000 crore according to the latest data, is expected to rise further despite the March 15 deadline for advance tax expiring.
“The department continues to collect tax since companies can deposit the sum without penalty or interest till March-end. There will be a spurt in collections till next week after which it will inch down,” said the official. He said the gap which needs to be filled during the remaining period is just Rs 38,000 crore.
Revising the estimates from Rs 3,70,000 crore in July 2009 to Rs 3,87,000 crore for direct tax in the February 2010 budget, the government had said “the receipts were showing progressively better result in the second half of 2009-10 and this trend is likely to continue with better growth prospect in 2010-11 in the economy.”
The indirect tax estimates, on the other hand, were revised downwards from Rs 2,69,477 crore to Rs 2,44,477 crore due to “negative growth in trade for the larger part of the financial year and due to the impact of lowering of taxes and duties”.
