Net direct tax collection for the first two months of the current fiscal has shot up by 172 per cent mainly on account of slower distribution of refunds.
However,experts cautioned that the jump should not be seen as growth because the collection largely comprises tax deducted at source and tax paid by professional firms. The advance tax numbers due later this month,they said,will truly reflect the situation.
Net direct tax collection grew to Rs 35,323 crore in April-May period,as against Rs 12,956 crore during the same period a year ago. However,the gross direct tax collection was just 3.62 per cent over the corresponding period last fiscal. Gross tax collection stood at Rs 52,232 crore as against Rs 50,407 crore during the same period a year ago.
The staggering growth in net collection was due to low refunds in the first two months. Tax refunds during the period stood at Rs 16,909 crore,55 per cent lower than the Rs 37,451 crore registered during the corresponding period last year. There was a decline of 55 per cent in refunds this year.
There was a special drive last year to clear pending refunds. This year the refunds will happen as per normal course. So the refunds are likely to go up towards the end of the year,they may rise by 20-25 per cent, an official source told The Indian Express.
Amitabh Singh,tax partner of E&Y,said,We should wait for the advance tax figures. That is indicative of the mood in the economy as corporates pay tax estimating their income. Gross tax collection is though dismal,one should not base opinion of the figure yet. Corporates pay 15 per cent of the tax in the first installment for the first quarter.
The net corporate tax collection during the period was Rs 9,576 crore as against a contraction of Rs 5,141 crore during the corresponding period last year while the personal income tax collection stood at Rs 25,732 crore as against Rs 18,079 crore during the period.
The Budget estimate for direct tax collection this fiscal is Rs 5.70 lakh crore during 2012-13 as against Rs 5.32 lakh crore estimated last fiscal.