The Hindu : Front Page : `Keep watch on top 100 corporate taxpayers'

Online edition of India's National Newspaper
Thursday, Jul 07, 2005

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Front Page

`Keep watch on top 100 corporate taxpayers'

Special Correspondent

The methods of tax evasion become more sophisticated

THE TAXMAN COMETH: The Union Finance Minister, P. Chidambaram, with the Revenue Secretary, K. M. Chandrashekher, at the 21st annual conference of Chief Commissioners and Directors General of Income Tax in New Delhi on Wednesday. — Photo: Kamal Narang

NEW DELHI: Confident that the direct tax collections this fiscal would be over 5 per cent of the gross domestic product (GDP) for the first time ever, the Union Finance Minister, P. Chidambaram, on Wednesday asked tax officials to sharpen their mop-up strategies. In particular, each commissionerate has been told to keep a "close watch" on the top 100 corporate taxpayers under its jurisdiction.

Addressing the Chief Commissioners and Directors General of Income-Tax while inaugurating their two-day conference here, Mr Chidambaram expressed confidence that in the current fiscal, the revenue collections through direct taxes would exceed that by way of indirect taxes such as customs and excise duty.

"In 2005-06, the direct tax-GDP ratio is expected to cross 5 per cent," he said while noting that, for the first time, direct taxes as a proportion to GDP had already crossed the milestone of 4 per cent during 2004-05.

Revealing that direct tax collections this year had been good thus far, Mr Chidambaram said: "These are important turning points in tax collections in India. Like in any other developed country, direct taxes will play an increasing role and contribute largely to the exchequer."

The Central Board of Direct Taxes (CBDT), he said, should gear up and prepare a roadmap for the next 5-10 year period to become the biggest tax-collecting instrument of the Government.

Later, to a query during the briefing session with newspersons as to whether the chief commissioners were told to monitor the top 100 taxpayers, Mr Chidambaram said there was nothing wrong in tracking to find out if the corporates had filed their TDS (tax deducted at source) returns on time and their payments were in accordance with what they disclosed in their quarterly statements.

In this regard, Mr Chidambaram observed that the methods of tax evasion were becoming more and more sophisticated and, therefore, the tax officials must also equip themselves to tackle the malaise. The investigation methods being adopted, he said, must graduate from "blunt" instruments of search and seizure to "sharper and intelligent" methods using information technology.

At the same time, there was a need for strengthening vigilance in the tax department and ensuring the highest standards of integrity, he said.

On the recovery of direct tax arrears, the Minister said that the Government had mopped up Rs 7,000 crores last year and a "tidier amount" is expected to be garnered this year too.

On the delay in tax refunds, Mr Chidambaram said, "we are now fixing timeframe for such cases to be disposed of. I do not deny that there are some bad cases. By and large, refunds have been given on time."

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