Net direct tax mop-up at 55.4% of target

Subhomoy Bhattacharjee

Net direct tax collections of the Centre till January this fiscal have reached only Rs 472.87 billion, which is just 55.4 per cent of the budget target of Rs 852.75 billion and Rs 1.20 billion more than last year.

The figures indicate that even after accounting for the final instalment of corporate tax which companies pay in March, the Centre may not be able to cross 80 per cent of the budget estimate for direct tax collections.

The dismal performance of direct tax collections is also in line with the trend in indirect tax collections. Excise tax has shown a 4 per cent growth in the same period, while customs duties are down by 10 per cent from last year's level.

The tax figures at the end of the first ten months show corporation tax has touched Rs 236.54 billion, which is only 53.5 per cent of the budget estimate (Rs 446 billion). Income tax collection is slightly better at Rs 231.27 billion, making it 57 per cent of the budget target of Rs 402 billion.

The flash figures of tax receipts show that the poor growth in net direct tax collections is also due to heavy refunds, which stood at Rs 131.62 billion compared to Rs 100.85 billion in the same period in 2000-01. The refunds have actually led to a fall of Rs 6.78 billion from last year's corporate tax collections.

However, even after accounting for the refunds, total direct tax collections have reached only Rs 604.49 billion which is just 6 per cent more than last fiscal's collections in the first ten months.

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