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Mining ban: IT dept takes Rs 3,000 cr hit

The Income Tax department is taking a hit of up to Rs 3,000 crore in tax collection following a Supreme Court-enforced ban on mining activity in Karnataka and Goa, a key IT department official said.

The mining sector is used to make up for 14 per cent of the region's total tax collection, a figure that's coming down to just two-three per cent, Chief Commissioner of Income Tax, Bangalore-I, K Satyanarayana, said.

"We are affected by Rs 2,500 crore to Rs 3,000 crore.This is a bit worrying for us and also for Central Board of Direct Taxes", he said, adding, the tax collection dip from the mining sector in Goa is substantial compared to Karnataka's Bellary district.

The region (Karnataka and Goa) is third in terms of IT revenue collection, after Mumbai and Delhi. Tax collection target in the region in 2012-13 is Rs 53,000 crore,and so far this financial year, Rs 32,830 crore has been achieved.

This compares with Rs 30,328 crore in the same period last year, a growth of eight per cent which is, however, below the national average of 14 per cent.

The slower growth has been attributed to the mining sector ban.Satyanarayana said the Department has noticed that a large number of organisations, particularly government departments, have not been remitting to the IT department the deducted TDS amount.

"This is a very serious lapse". He also said big corporates are shying away from paying advance tax on their income citing liquidity problems, adding, the Department is in touch with these firms in this regard.

Director General of Income Tax (Investigation), Bangalore, S Ravi said the Department has noticed widespread prevalence of non-payment of tax on joint development activities in real estate sector in Bangalore and its suburbs.

"In the last week of Nov2012, large-scale enquiries were carried out by the Directorate in 180 such cases all over Bangalore and suburbs.The exercise confirmed that non-payment of tax is widely prevalent and compliance has to be enforced.

"Referring to cases where property is registered for a price less than guideline value, Ravi said intelligence wing of the Department is examining 52,001 pieces of information relating to 2006-07 to 2008-09, involving substantial "taxeffect" amounting to crores of rupees for further probe.

"In respect of FY 2009-10 to 2010-11, the Department has collected 59,984 pieces of such information with huge tax effect, and they are also being taken up for further verification", he added.