Tax collections fall short of Rs 40k cr

Proposals to lead to gain of Rs 18k cr next year

Hammered by economic slowdown the government’s total tax collections in 2012-13 will fall short of the Budget Estimate by about Rs 40,000 crore as per the Revised Estimates, but the finance ministry is targeting a 19 per cent jump in the overall collections next year over this year’s RE.

The measures taken by Finance Minister P Chidambaram in the Budget on direct and indirect taxes will itself result in a revenue gain of about Rs 18,000 crore.

“My tax proposals on the direct taxes side are estimated to yield Rs 13,300 crore and on the indirect taxes side Rs 4,700 crore,” Chidambaram said in his Budget speech.

The shortfall will be Rs 4,422 crore for direct tax collections and Rs 35,498 crore for indirect tax collections.

The finance ministry has set a target of Rs 6,68,109 crore for direct taxes next year, against the Budget Estimate of Rs 5,70,257 crore this year. Income tax collections will significantly contribute to this rise. The BE for wealth tax for 2013-14 at Rs 950 crore is even lower than this year’s BE of Rs 1,244 crore.

For indirect taxes, the target is Rs 5,65,002 crore next year, representing an increase of barely 11.8 per cent over the this year’s Budget Estimate. The growth will primarily be driven by service tax collections which are projected to increase by 45 per cent over this year’s BE.

Both excise duty and customs collections fell short of the target by about Rs 22,000 crore each. Corporation tax collections also fell short of the target by over Rs 14,000 crore, while income tax collections exceeded the estimate by about Rs 10,000 crore.