With no stimulus rollback,govt finds ways to boost tax kitty

With the finance minister maintaining that stimulus packages provided including excise and service tax cuts for boosting the economy is not likely to be rolled back....

With the finance minister maintaining that stimulus packages provided including excise and service tax cuts for boosting the economy is not likely to be rolled back,the government is chalking out ways to shore up direct tax collections for dealing with the expected shortfall in the indirect tax kitty.

The revenue department is contemplating raising the tax demand in the current years scrutiny assessment and take stringent actions against defaulting tax payers,official sources told The Indian Express.

The sources added that the focus on recovery of tax arrears would also be increased to meet the revised direct tax collection target of Rs 4,00,000 crore as against the budgetary target of Rs 3,70,000 crore.

Story continues below this ad

The tax recovery target for the current years was set at Rs 13,153 crore compared to Rs 10,016 crore in the last fiscal and Rs 9,071 crore in 2007-08. The department is also planning to raise the current scrutiny assessment demand. The scrutiny assessment demand for the last fiscal was Rs 21,226 crore.

Also,the finance ministry will monitor advance tax payments and will chase big tax payers by matching their profits with the taxes paid by them.

Advance tax corporate tax collections in the second quarter of this fiscal rose 14.7 per cent compared with the corresponding period last year. The recovery was led by sectors like banking,automobile and software. Advance corporate tax collections for the quarter ending September stood at Rs 44,010 crore against Rs 38,367 crore in the corresponding period a year ago. Further,with the cleaning up of the TDS database,tax payers who have stopped filing returns will also be hauled up and notices issued to them.

After the collapse of Lehman Brothers in mid-September and the crisis that followed,the government provided stimulus packages to prop up the sagging economy. The government slashed excise duty by 6 per cent and service tax by 2 per cent. The reduction has hit indirect tax collections,with service and excise collections showing negative growth. Though the budget target of the direct tax collections would be met,meeting the revised target seems to be a difficult task,sources added.