Govt may go slow on tax refunds; refrain from oil duty cuts
Worried that high inflation and moderating growth could impact tax collections in 2011-12, the government today indicated that it may go slow on tax refunds and refrain from reducing duties on petroleum products.business Updated: May 24, 2011 23:24 IST
Worried that high inflation and moderating growth could impact tax collections in 2011-12, the government today indicated that it may go slow on tax refunds and refrain from reducing duties on petroleum products.
The indications were given by top revenue official at the annual meeting of senior Income Tax officers and finance minister Pranab Mukherjee, who was present there, agreed with the assessment.
Commending I-T department for tax collection of over Rs 4.46 lakh crore in FY'11, Mukherjee cautioned that achieving the target of Rs 5.33 lakh crore FY'12 could be difficult because of high commodity prices and moderation in growth.
"Inflation can affect domestic demand and thereby adversely affect GDP growth... and consequently our tax collection", revenue secretary Sunil Mitra said.
He opposed any roll-back of customs or excise duty on petroleum products and said such an action could also impact indirect tax collection.
"Any roll-back of customs duty on crude oil or of excise duty on petroleum products on account of rising crude prices or on account of deregulation of diesel prices will significantly impact our indirect tax collection as well," Mitra said.
"Given these possibilities, I have serious apprehensions in respect of our tax revenue collection this year," he added.
Mitra also indicated that the government might have to go slow on tax refunds, in case collections moderate this fiscal.
"The Board's (CBDT) proposal to clear all pending refunds of the assessment years 2010-11 and 2011-12 will require to be moderated in keeping with the actual performance in direct tax collections," he said.
Highlighting that the collection of direct taxes has almost doubled in the last four years from 2006-07 to 2010-11, Mukherjee said this has been made possible by rationalisation of tax structure and improvement in tax administration and tax-payer's services through intensive use of technology.
For 2011-12, the Income-tax Department has been given a tax collection target of about Rs 5.33 lakh crore, which is at 20 per cent growth over the actual collections of the last fiscal, the Finance Minister said.
Pointing out to the challenges in meeting the target, Mukherjee said the international economic situation is not very conducive and highly uncertain.
"The global recovery is very slow and sluggish. Besides, the international commodity prices of energy especially fossil fuel are quite volatile causing inflationary trend," the Minister said, adding that this will adversely impact the GDP growth and liquidity position in the world market.
In this situation, Mukherjee said officers of the Income Tax Department would have to work very hard to achieve their tax collection targets for the current year and strictly implement tax compliance regime.
Overall, gross tax collections during 2011-12 have been pegged at Rs 9.32 lakh crore, up from Rs 7.90 lakh crore realised during the previous fiscal.
Later in the evening Mukherjee held a close door meeting with top IT officials involved in assessment of high value cases. In the past one year IT Department has unearth 20 cases of tax evasion amounting to over Rs 100 crore.
Sources said the minister asked Chief Commissioners and Director Generals who participated in the meeting to strengthen their efforts to check tax evasion.