The finance ministry wants to focus on the top 100 companies to maximise its revenue efforts in this fiscal,instead of spreading its tax officials thinly across all sectors.
An indication of this approach was given by finance minister P Chidambaram today to the top officials of the indirect tax department whom he asked to concentrate on the top 100 tax payers from each zone. The controversial Direct Taxes Code is also likely to be redrawn extensively which could mean jettisoning the controversial provisions.
The approach will be seen as a major tax friendly measure from the department that has earned brickbats from India Inc in the last couple of years. In this period it has sent out a record number of notices,creating an impression of overbearing tax administration even among the foreign investors.
The tax department will work towards becoming a taxpayer-friendly organisation,which is not regarded as a hounding tax administration, he said at the meeting of chief commissioners of indirect tax.
Chidambaram has a strong reason to change the approach as statistics show that the top 100 assesses make up 90 per cent of the total collection for most tax categories. He is expected to repeat the mantra at his meeting with the officials of the income tax department too,next month.
On DTC,he said the over arching legislation requires a fresh look.
Explaining the rationale of his approach,the minister said,In customs,excise and service tax,zone wise or charge wise,the top 100 tax payers under customs,the top 100 under excise and the top 100 under service tax,account for about 90 per cent of all tax collection. So,really each charge has to focus only on the top 100. All the others contribute only around 5 per cent. If we concentrate on only these we will achieve our target. Why do we harass those who contribute only 5 per cent, Chidambaram said after meeting here.
Expressing hope that the tax collection target of 2012-13 of Rs 5.05 lakh crore would be met,the finance minister said that the April-July collection does not reflect the trend of the tax collection for the full year. I am confident that numbers beyond August will be more encouraging, he said.
During the first four months of the current financial year,the indirect tax collection rose by 22 per cent as against the budgetary target of 27 per cent. The total indirect tax collection during the period stood at Rs 1.45 lakh crore as against Rs 1.19 lakh crore in the corresponding period last fiscal.
The 22 per cent increase in indirect tax collection was mainly on account of hike in rates of excise and service tax in the Budget.