After good growth in the first quarter belying slowdown fears, the Union finance ministry is set to enhance the budget target for tax collection in the current financial year.
A senior ministry official said the process had begun with finance minister Pranab Mukherjee raising the collection target for Tamil Nadu by 10 per cent over the budget one last Saturday, at a meeting with income tax and customs and excise officials in Chennai. He said the exercise was likely to continue when the minister visited other centres.
The official stressed that the cut in petroleum excise and customs duty was unlikely to impact achievement of the collection target in a big way, as revenue realisation in the first quarter clearly indicated increased industrial activity.
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In the case of direct taxes, analysis of the advance tax paid by the top 1,000 companies clearly indicated that new growth centres were emerging through the country. “This will certainly give a boost to the tax collections,” said the official.
Net indirect tax receipts in the first quarter (April-June) this year recorded 32 per cent increase to Rs 76,499 crore, while gross direct tax collections rose 23 per cent to Rs 1,03,000 crore. The growth in both was higher than earlier estimates for the year. Net direct tax receipts, however, showed a 17 per cent dip to Rs 57,000 crore, on account of a 200 per cent increase in tax refunds. This is set to improve, with reduced refund pressure.
The budget estimate for indirect tax collections this year was Rs 392,908 crore, an increase of 15 per cent over last year. For direct tax collections, the estimate is Rs 532,651 crore, about 19 per cent higher than 2010-11. Actual indirect tax collection in 2010-11 was Rs 3,42,824 crore and direct tax collection was Rs 4,46,070 crore.