I-T Receipts Slow Down

The growth averaged 20 per cent in the first quarter ended June 30.

The slowdown has occurred largely on account of sluggish receipts under corporation tax. The receipts under corporation tax aggregated Rs 6,504 crore at the end of September as compared with Rs 6,328 crore in the same period in 1995-96.

There has been a marginal improvement in the outlook for corporation tax since the compilation of the data for the quarter ended June. Collections had declined to Rs 1,686 crore as compared with Rs 1,880 crore in April-June 1995-96.

Income-tax accruals in this period aggregated Rs 6,789 crore as compared with Rs 5,548 crore in the same period last year -- indicating a growth of 22 per cent. The growth in income-tax collections at the end of June had averaged 51 per cent at the level of Rs 2,832 crore.

The data, which are net of the refunds paid out by the income-tax department, also include the second installment of advance tax payments. The first installment was on June 15 and the second on September 15 -- by which time corporates are required to cough up 30 per cent of their annual tax liabilities.

According to senior finance ministry officials, it is still too early to ascertain the exact cause of the slowdown.

Among the contributory factors listed by the officials is the high interest rate regime which is forcing a squeeze on corporate profits. In addition, there has also been a reversal in bank profits in 1995-96.

Officials are confident that any shortfall would be made up through collections under MAT. Collections under MAT had been pegged at Rs 1,800 crore in the Union budget.

They also believe that the recent rationalisation measures initiated by the revenue department may have also contributed to lower collections.