Taxmen to chase errant firms to meet collection target

Authorities say they are banking on recovering arrears worth Rs 12,000 crore

As corporate bigwigs falter in tax payment in the third quarter, income tax sleuths here have decided to go after the arrears and conduct fresh surveys on erring companies to achieve their target.

“Overall tax collection so far is better than last year. But, some corporates have not done well. So we are banking on recovering arrears worth Rs 12,000 crore in the final quarter. We are also trying to increase the number of surveys to achieve the target of Rs 2,560 crore,” principal chief commissioner of income tax and head of Mumbai region D S Saxena said on Thursday.

KEY TAKEAWAYS

• I-T department in Mumbai to increase surveys to meet target of Rs 2,560 crore
• Annual target for direct taxes is Rs 7,980 crore, up 16% over the previous year
• Officials say overall tax collection is satisfactory despite many corporate groups faltering over payments
• Net tax collected as on December 22 is Rs 1.6 lakh crore, an increase of 14.6% over the previous year

The Central Board of Direct Taxes (CBDT) had set this target for Mumbai region, the largest tax region which contributes over a third of total tax revenue. The annual target for direct taxes is Rs 7,980 crore for the current financial year, up 16 per cent over the previous year.

According to officials, many corporate groups have faltered in tax payment in the third quarter, though overall collections have been satisfactory.

Net tax collected by the Mumbai region as of December 22 stood at Rs 1.6 lakh crore, up 14.6 per cent from Rs 1.4 lakh crore in the same period last year. Out of this, corporation tax stood at Rs 1.08 lakh crore, up 18.4 per cent from Rs 91,363 crore a year ago.

Still, corporation tax collection during the third quarter has been a worry as only a week is left for them to pay up. Tax collections from steel and cement companies have fallen drastically in the third quarter.

Steel majors Tata Steel and Jindal Steel entered negative zone on tax payment this year. While for the first nine months Tata Steel's payout is lower by 16 per cent, in the case of Jindal Steel it is down 81 per cent.

Similarly, engineering major L&T and cement major Ambuja

also paid less tax in the first three quarters than year-ago.

While payout by L&T was down 15 per cent at Rs 580 crore from Rs 680 crore a year ago, in case of Ambuja Cements it was down 16 per cent at Rs 226 crore.

However, IT majors TCS and Tech Mahindra paid higher tax and same was the case with Tata Chemicals which reported 6 per cent more outgo at Rs 175 crore, despite a 15 per cent drop in its third quarter payout at Rs 71 crore.

FMCG companies too have paid more tax this year. Industry major HUL paid 6 per cent more tax in the third quarter at Rs 620 crore against Rs 600 crore.

Johnson & Johnson paid Rs 252 crore for the nine-month period, up 90 per cent from Rs 132 crore. For third quarter alone, it has coughed out Rs 92 crore against Rs 35 crore in the year-ago period.

Pharma companies have also done well during the first nine months with companies like Aristo paying 80 per cent more, Cipla 5 per cent more while Lupin was almost flat with 1 per cent increase.