New Delhi: The Modi government’s revenue collection from direct taxes is set to be well short of the target for 2018-19 despite an impressive expansion of the tax base.
As of 23 March, the net direct tax collection stood at Rs 10.21 lakh crore against a revised target of Rs 12 lakh crore, tax sources told ThePrint.
The target for direct tax collection was revised upwards from Rs 11.5 lakh crore on 1 February when railways and coal minister Piyush Goyal presented the interim budget in the absence of finance minister Arun Jaitley.
The revision came on the back of increased collections in the first three quarters of the financial year.
“The finance ministry had earlier estimated direct tax collections to exceed the target by a reasonable margin and therefore the target was reset. Collections were also buoyant till January,” said an independent analyst who did not want to be identified.
However, with the government falling short of the revenue target, several tax officials have been transferred due to poor performance, said a senior finance ministry official who spoke on the condition of anonymity.
In the budget documents, Goyal had pointed out that number of returns filed until January increased to 6.85 crore from 3.79 crore — an 80 per cent growth in tax base.
“For making the life of our direct tax-payers easy, we reduced tax rates, more for the common man and middle class, and made the interface with the tax department much simpler and largely faceless,” the minister had said in his speech.
“Due to this, the tax collections increased significantly from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore this year.”
“This is going to dent the government’s overall macro economic projections as it was expecting direct taxes collection to surpass the target and even offset some other shortfalls. Now it seems unlikely,” said the analyst.
In the budget documents, the Modi government had revised the goods and services tax (GST) collection target downwards to Rs 6.43 lakh crore from Rs 7.43 lakh crore for the current fiscal.
“Earlier the problem was with GST tax collection figures. Now it seems that even direct tax mop up may well be short of the target, not just the revised one but also the original number of Rs 11.5 lakh crore,” the analyst added.
Goyal had also projected a 15 per cent growth in direct tax revenue at Rs 13.80 lakh crore for 2019-20.
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