High refunds pull down net direct tax mop-up 17

The Central Board of Direct Taxes CBDT disbursed Rs 46,868 crore refunds during the period against Rs 15,366 crore in the same period during the last fiscal. It estimates a tax disbursement of Rs 1 lakh crore in 2011-12.

In fact,on account of high refunds,the government had to resort to short-term borrowings. The government has been maintaining that it would be difficult to meet tax collection target this fiscal due to high cash outgo on account of refund and rising borrowings cost due to tight monetary policy of the central bank. The increase in borrowing cost is likely to impact India Inc and the corporate tax collections.

As such,the economic growth is likely to moderate as is evident from the slowing industrial production. The Index of Industrial Production IIP declined to 6.3 per cent in April this fiscal against 13.1 per cent in the same period a year ago.

The finance ministry has also indicated that the 9 per cent growth projection for this fiscal may have to be revised on account of the high global commodity prices and the ongoing debt crisis in Europe.

Total corporate tax mop up stood at Rs 68,223 crore,up 23.49 per cent against Rs 55,244 crore in the same period of the previous year.