Pranab confident indirect tax target will be exceeded

Finance Minister Pranab Mukherjee on Monday exuded confidence this year’s indirect tax collection target of about Rs 5 lakh crore would be surpassed. The target is significantly higher than last year’s actual collections of about Rs 3,93,000 crore.

Last year’s indirect tax collection had fallen slightly short of the estimate.

“I am confident the department would leave no stone unturned in ensuring the targets for the current year are not only met, but handsomely exceeded,” Mukherjee said at the annual conference of chief commissioners and directors-general of customs, central excise and service tax today.

The target for indirect tax collection in 2012-13 of Rs 4,99,694 crore is 27 per cent higher than the collection in 2011-12. This target was fixed after taking into account the rise in central excise and service rate from 10 to 12 per cent, and the buoyancy observed in service tax collections.

“We are going to make all efforts required to achieve the target for this financial year,” said S K Goel, chairman, Central Board of Excise & Customs (CBEC).

Mukherjee said despite a slowdown in growth and the duty cuts on petroleum products effected in June 2011, last year’s collections fell marginally short of the target. He said 6.5 per cent growth gross domestic product (GDP) in 2011-12 was disappointing, adding there was practically no headroom for a proactive fiscal policy, as the second round of global uncertainty and the resulting slowdown had quickly followed the previous one.

The finance minister said there was an urgent need to reverse the declining trend in tax-GDP ratio by augmenting tax collections. The ratio stood at about 12 per cent in 2007-08, before dropping to 10.5 per cent in 2011-12.

Mukherjee said the negative list for taxation of services announced in the Budget would come into effect from July 1. Expressing concern over the revenue locked in litigation, he asked CBEC officials to try to unlock these. He asked them to sharpen their audit skills and scrutinise assessees’ records to bring any tax that might have escaped assessment into the kitty.

He also urged them to detect frauds that were often intelligently planned and meticulously executed.