Direct tax growth lower than estimate in April-December 2018

This is despite a robust 43.5 per cent year-on-year (y-o-y) growth in number of income tax e-returns filed for the first nine months of the fiscal, which stood at 6.25 crore.

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The refunds in the April-December period was Rs 1.30 lakh crore, 17 per cent higher than the same period last year.

The net (post-refunds) direct tax collection for April-December period this fiscal was Rs 7.43 lakh crore, up 13.6 per cent from the year-ago period. The growth in collection in the first nine months of the year was marginally lower than the rate of 14.4 per cent required to meet the budget estimate of Rs 11.5 lakh crore for direct taxes in FY19.

This is despite a robust 43.5 per cent year-on-year (y-o-y) growth in number of income tax e-returns filed for the first nine months of the fiscal, which stood at 6.25 crore. The refunds in the April-December period was Rs 1.30 lakh crore, 17 per cent higher than the same period last year.

The government has been banking on direct tax collection to somewhat bridge the likely deficit in GST collections.

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Officials of the Central Board of Direct Taxes (CBDT) had said last month that with most refunds already sanctioned and advance tax installment in December, the direct tax collections would grow at a higher pace.

The lack of expected growth in mop-up prompted the CBDT chairman Sushil Chandra to send missives to tax commissioners across the country asking them to pull up their socks and improve collections in the last quarter of the fiscal. Chandra also expressed concern that the budget target may prove difficult to meet if collections don’t grow faster in Q4.

The third installment of advanced tax, which was to be paid by December 15, grew at lower rate compared with the first half of the fiscal.

“The growth rate of corporate advance tax is 12.5 per cent and that of personal income tax is 23.8 per cent,” the government said. The comparable figures were 16.4 per cent and 30.3 per cent for April-September period. Advance tax is required to be paid in four installments of 15 per cent, 45 per cent, 75 per cent and 100 per cent by middle of June, September, December and March respectively.

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The net growth in corporate income tax collections came in at 16 per cent and that in personal income tax was 14.8 per cent.

“It is pertinent to mention that collections of the corresponding period of FY 2017-18 also included extraordinary collections under the Income Declaration Scheme (IDS), 2016 amounting to Rs 10,844 crore (third and last installment of IDS), which do not form part of the current year’s collections,” the government said.—FE

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No e-way bill, if returns not filed for two straight months

In a bid to force non-compliant businesses to file returns regularly, the Finance Ministry has barred e-way bill generation while transporting consignment if the supplier or recipient of the cargo has not furnished returns for two consecutive tax periods under Goods and Services Tax (GST).

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The e-way bill is required to be generated from a common portal by a business for movement of consignment worth more than Rs 50,000. For this, the supplier/recipient furnishes part A of the form with details of GST identification number, value of goods and invoice number among others. Further, part B of the e-way bill form is furnished by the transporter with details of vehicle used.

“This effectively means that businesses who fail to file returns cannot transport goods at all,” Rajat Mohan, partner at AMRG & Associates, said. —FE