It is a staggering amount staring at the government: a possible Rs 25,000-crore (Rs 250-billion) shortfall in the direct tax collection from the Budget target in the current financial year.
A comparison of the direct tax mop-up trend during the first eight months of the financial year with the previous two years' clearly indicate that the net direct tax collection in 2011-12 would be around Rs 5,00,000 crore (Rs 5,000 billion) as against the Budget target of Rs 5,32,651 crore (Rs 5,326.51 billion), according to a senior revenue department official.
"As per the calculations made by the department, at least 50 per cent of the Budget target should have been collected by November. But it is only 44 per cent," he says.
"The realisation made during this period gets doubled in the last four months of the financial year."
The official explains that the gross tax collection till November in the current financial year stood at around Rs 3,05,000 crore (Rs 3,050 billion).
This should get doubled to about Rs 6,10,000 crore (Rs 6,100 billion) so as to meet expectations.
As the refunds in the current financial year is expected to be around Rs 1,05,000 crore (Rs 1,050 billion), net direct tax mop-up would be around Rs 5,05,000 crore (Rs 5,050 billion) in the current scenario, he said.
The official stresses that the Central Board of Direct Taxes is trying its 'level best' to meet the Budget target of Rs 5,32,651 crore (Rs 5,326.51 billion), but the current trend is 'clearly hinting' towards a shortfall of Rs 25,000 crore (Rs 250 billion).
The net direct tax realisation during April-November last year was at Rs 2,16,628 crore (Rs 2,166.28 billion).
The figure meant that authorities had crossed 50 per cent of the Budget target of Rs 4,30,000 crore (Rs 4,300 billion).
As for 2009-10, the net direct tax mop-up in the pertinent period was at Rs 1,83,822 crore (Rs 1,838.22 billion); this was also around half the Budget target of Rs 3,70,000 crore (Rs 3,700 billion).
In the current financial year, however, it has been Rs 2,35,333 crore (Rs 2,353.33 billion), which is 44.2 per cent of the Budget target of Rs 5,32,651 crore (Rs 5,326.51 billion).
The refunds during April-November have been close to Rs 70,000 crore (Rs 700 billion).
Another
For, the initial indication of direct tax mop-up in December was itself not encouraging. This is significant, as the CBDT is pinning hopes on the third instalment of advance tax collection due on December 15.
This, when the government is already reeling under pressure due to a likely shortfall in disinvestment and telecom spectrum revenue targets on the one side and a ballooning petroleum and fertiliser subsidy bill on the other.
Thus, the impending slippage on the direct tax front is set to add to its woes in keeping the overshooting of the fiscal deficit target of 4.6 per cent of the GDP to minimum.
Analysts and tax experts feel the CBDT will resort to measures including stepping up the investigation process and now initiate search and seizure operations.
"The objective," notes an expert, "will be to collect immediate revenue."
Income tax department officials say their office, keeping in mind the sluggish tax collection situation, has already initiated measures to increase the revenue realisation.
These include the monitoring of advance tax payments of top cases and assigning quarterly targets for disposal of pending cases for early recovery of demands.
"We are using all the information available with the department," reveals an official.
"They have been accumulated from various sources, including ones received from abroad to identify tax evasion.
"The idea is to collect as much as possible, so that at least the Budget target could be met."
