The IPL season is in full swing, and expect the Tax department to also do the heavy hitting as seen in the 20-20 cricket matches. For, a drop in tax collections may prompt the department's field officers to up the ante and meet rising run rate.
Direct tax collection numbers have shown a dipping trend, even though revenues from GST and disinvestment receipts have shown an uptick. And, this has set the alarm bells ringing.
Neena Kumar, a member of the Central Board for Direct Taxes has been reported as having written to the principal chief commissioners to take urgent steps in meeting revised estimates.
In a letter, contents of which have been reported widely by news agencies, Kumar has written of an urgency.
Tax collection until Tuesday last week was reported at 10.21 lakh crores, 15% short of the revised estimate for Fiscal year 2019. The revised estimate for tax collection stands at Rs 12,00,000 crores.
Kumar wrote, "The minor head-wise analysis indicates worsening trend of negative growth in regular collections at (-)6.9% as against (-)5.2% in the last week. This is an alarming situation which needs immediate attention."
Indirect tax revenues from collection of GST have been reported on the up (April-February collections at Rs 97,300 crores, up from target of Rs 95,650 crores), however direct taxes such as income-tax contributions is the main revenue header.
"You must, therefore, as discussed telephonically also, take all possible actions urgently, especially with respect to recovery of arrears and current demand, so as to achieve the targets for collection," added Kumar.
In a story published in the Business Standard, a senior tax official has been quoted anonymously as saying that an increase of Rs 50,000 crores in the interim budget had made achieving the revised target difficult. However, the official noted that the final collection could be in range of Rs 11.3-11.5 lakh crores.
The shortfall in income-tax revenues may increase fiscal deficit as well as spending. This, may prompt policy-makers including respective ministries to re-consider their respective budgets and spending. However, disinvestment receipts have seen an uptick.
According to the department, growth in TDS was reported as growing by 18% to Rs 4.44 lakh crores as on March 11. Self-assessment tax grew by 6.5% to Rs 83,465 crore. Numbers for regular assessment tax, that is recovery made from arrears, showed a drop of 5.4% compared to the same period a year ago.
Previously, the department hoped to collect a bounty from the advance TDS (deadline of March 15) collected by banks. Banks are yet to transfer this amount, and the department has requested them to transfer that amount before March 31st.
With barely three days left for the year to end, field officers are hence expected to close on the arrears, including mopping-up of cases linked to demonetisation linked cash deposits, and pressing for more cash and seizures.