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Tax mop up may fall short by Rs 4,000 cr
Monica Gupta
 
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January 21, 2006 01:05 IST
MONICA GUPTA Low customs duty collection key reason for the drop. The combined direct and indirect tax collection for 2005-06 may fall short of the Budget estimates of Rs 3,69,027 crore by around Rs 3,000-4,000 crore.

While the Rs 8,000-crore shortfall in direct tax collection will be partly covered by a higher mop-up of around Rs 4,000 crore in indirect tax, there may still be a gap.

Officials pointed out that there was concern in the revenue department regarding the impact of low imports figures on customs collection.

During December 2005, imports witnessed an increase of only 8 per cent to $ 10.98 billion, compared with $ 10.13 billion in the corresponding period in 2004.

"Imports are slowing down on account of lower imports of gold and vegetable oil owing to an improved domestic production," an official said, adding that the total collection of customs was now expected to be about Rs 2,000 less than the earlier estimates of Rs 65,000 crore.

The revenue department had increased the internal collection targets for both customs and service tax to make up for the shortfall in excise collection. Excise collection increased only about 9.6 per cent up to December.

However, officials added that direct tax collection was expected to be higher in February on account of a rise in Income Tax mop-up.

"The department has identified close to 2,500 cases where it has raised demands after a scrutiny. We hope that a substantial portion of the demands raised will be paid up," an official said.

Fringe Benefit Tax collection continues to be dismal as it has been able to net only around Rs 440 crore in addition to the Rs 1,776 crore collected up to December 31, 2005.

Up to January 15, corporation tax collected was Rs 64,500 crore, which is 24 per cent higher than the Rs 52,100 crore collected in the corresponding period last year.

Income tax collection (inclusive of FBT, Securities Transaction Tax and Banking Cash Transaction Tax up to December 31) is Rs 42,200 crore, which is 28 per cent higher then Rs 32,900 crore netted up to January 15, during 2004-05.


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