CBDT works overtime for review meeting with FM

Meeting comes after Kelkar panel questioned tax collection target

Amid muted direct tax collections and observations by Kelkar panel that the Budget figures on tax target are over-estimated, Finance Minister P Chidambaram will take a review meeting of the officers of the Central Board of Direct Taxes (CBDT) on October 8. The officials are working overtime in order to come fully prepared for the meeting with the finance minister who has an eye for detail.

Chidambaram took a similar meeting with officials from the Central Board of Excise & Customs today.

Direct tax collections have remained subdued in the year so far due to a slow economic growth and sluggish industrial growth. The finance minister is likely to assess the current revenue situation and discuss the way forward to meet the Budget Estimate of Rs 5.7 lakh crore this year.

 

The meeting also assumes significance in the backdrop of Shome panel submitting its report on General Anti-Avoidance Rules (GAAR) and retrospective taxation of indirect transfer of Indian assets. The report on retrospective taxation is likely to be made public shortly for seeking public comments. Earlier this week, the finance minister had said the report would be released as soon as it is seen by the finance ministry. Based on the panel's GAAR report, the finance ministry will make changes to the guidelines on GAAR. The report has proposed deferring the rules by three years.

Gross direct tax collections merely increased by 6.51% to Rs 1,64,413 crore in April-August 2012-13, against Rs 1,54,361 crore in the same period last year. The muted growth can be attributed to almost flat corporate tax collections during the five-month period.

CBDT Chairperson Poonam Kishore Saxena and all members of the Board as well as joint secretaries, commissioners of income tax, deputy secretaries, directors, under secretaries and Direct General of Income Tax (Systems) will attend the meeting. To make “suitable preparations” for the review meeting all of them have been asked to work on October 7, which is a Sunday.

The Vijay Kelkar Committee in its report made public last month recommended to the government to prune its subsidies, check even plan expenditure, raise at least Rs 30,000 crore from disinvestment and shore up tax-GDP ratio so that the Centre’s fiscal deficit could be reined in at 5.2% of GDP for the current financial year.

The committee had warned that fiscal deficit would reach 6.1% of GDP against the Budget estimates of 5.1%. It said the Budget had overestimated tax receipts by Rs 60,000 crore and underestimated subsidies by Rs 70,000 crore.