Govt eyes higher direct tax kitty to shore up revenues

NEWDELHI: Pressure is mounting on the direct tax department to exceed its tax collection target, as doubts about revenue receipts grow larger, government and tax officials familiar with the matter said on condition of anonymity.

Top officers in the tax department say they have been asked to ensure additional collection of at least ₹20,000 crore this financial year. The target for personal and corporate tax receipts was set at ₹9.8 lakh crore for 2017-18.

“Since compliance is in focus, the expectation is that the collection will also increase. First, the direct tax target was revised upwards to ₹10 lakh crore from ₹9.8 lakh crore, and now the direction is to increase it as much as possible even beyond the additional ₹20,000 crore,” said one of the tax officers.

The demand comes at a time when questions are being asked about the amount of Goods and Services Tax that will come in this year; collection of GST has dipped for two consecutive months since October, and, anyway, this year was expected to see only 11 months of GST revenue.

“The government’s balance sheet is under pressure. A ₹27,300 crore of shortfall from RBI’S dividend, ₹13,000 crore of shortfall due to excise duty cuts (petroleum products), ₹40,000 crore likely slippage on account of GST and ₹14,500 crore shortfall in spectrum revenue receipt,” said Abheek Barua, chief economist, HDFC Bank.

At ₹80,808 crore for November, GST collection is at its lowest since its implementation in July 2017.

Most believe that the reduction in rates of about 200 items in November and lower compliance is the reason.

Government data shows that of 9.9 million registered tax payers, 5.3 million paid GST.