The Hindu : Business : Tax collections cross target after nine years

Online edition of India's National Newspaper
Wednesday, Apr 21, 2004

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Business

Tax collections cross target after nine years

By Our Special Correspondent

The Revenue Secretary, Vineeta Rai, flanked by the Finance Secretary, D. C. Gupta (right) and Ashok Lahiri, Chief Economic Advisor, addressing a press conference in New Delhi on Tuesday. — Photo: Kamal Narang

NEW DELHI, APRIL 20. Buoyant revenue collections for the last fiscal, 2003-04, will provide a good cushion for the next Government when it finally presents the budget for this year. Tax inflows have risen by 18 per cent, according to provisional data, ensuring that the budget target has been crossed for the first time after nine years. This has also pushed up to the tax-GDP ratio to over 9 per cent after five years.

Disclosing this here today, the Finance Secretary, D. C. Gupta, said direct tax collections rose by a steep 27 per cent while indirect taxes increased by 12.3 per cent.

The total revenue collections are estimated at Rs. 252,162 crores as against the budget estimates of Rs. 249,315 crores. Direct tax revenues crossed the one lakh crore mark for the first time to touch Rs. 104,678 crores while indirect taxes are estimated at Rs. 147,484 crores in 2003-04.

He said the buoyancy in revenue collections had been achieved despite several concessions given to industry. This is the first time since 1995-96 that the provisional figures of revenue collections have exceeded budget estimates. Besides, revenue collections during 2003-04 have shown the highest tax growth since 1999-2000.

It is also for the first time in recent years that the Centre is slated to attain the revised estimates figure for the year. According to the Revenue Secretary, Vineeta Rai, the revised estimate of Rs. 252,900 crores is expected to be crossed as the Government expects Rs. 1,000 crores from tax deducted at source (TDS) and another Rs. 500 crores from indirect taxes in the coming days.

Regarding direct tax collections, she said the budget estimate was at Rs. 95,714 crores, which was revised upwards to Rs. 103,400 crores in 2003-04. Direct taxes rose mainly due to a huge rise of 36 per cent in corporation tax to reach Rs. 63,882 crores.

This is higher both the budget target of Rs. 51,499 crores and revised estimates of Rs. 62,986 crores for 2003-04. Income tax collections rose by 13.6 per cent to reach Rs. 40,703 crores. This was lower than the budget estimate of Rs. 44,070 crores but higher than the revised estimate of Rs. 40,269 crores during the last fiscal..

The surge in direct taxes has taken place despite an increase in the refunds to 51.43 lakhs amounting to Rs. 24,888 crores. The number of taxpayers also went up to 3.40 crore from 3.31 crore in the previous fiscal owing to several initiatives to make tax administration user-friendly, efficient and transparent. Besides steps were taken in the area of tax reforms for setting up tax information network, online tax accounting system, electronic clearing system for refunds and electronic data interchange customs assessments. Tax policies were also reoriented to encourage voluntary compliance with minimal intrusive action like search and survey. The number of searches conducted during the year was 50 per cent less than the previous year as tax policies.

Ms. Rai said indirect tax collections were at Rs. 147,484 crores, which is lower than both the budget estimate of Rs. 153,746 crores and revised estimate of Rs. 149,500 crores. The growth in indirect taxes was 12.3 per cent. This level of increase was possible despite indirect taxes having been substantially reduced in the last quarter of the financial year to moderate inflationary pressures, encourage investment and promote growth in core economic sectors.

She said excise collections rose by 11.95 per cent to Rs. 91,016 crores while customs collections increased by 8.21 per cent to reach Rs. 48,606 crores.

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