Finance Minister (FM) Nirmala Sitharaman on Friday expressed optimism over achieving the tax-collection target for this fiscal year (2019-20 or FY20), despite looming doubts from within the tax department.
The Union Budget, presented last month, projected a direct tax collection growth of 17.3 per cent, whereas the mop-up has been only 4.65 per cent up to August 15, according to government officials.
Sitharaman, however, was confident that the target would be achieved without any harassment to taxpayers.
“I have been having interactions with tax officials across the country. I didn’t get the feeling that they will have to stretch too far. Target will be met without any harassment,”
said the FM.
Last week, Sitharaman interacted with tax officials from Ahmedabad. Earlier this week, she held consultations with tax authorities in Varanasi.
The FM also expressed strong views about alleged harassment. She said from October 1, all notices, orders, and summons by the income tax authorities will be issued through a centralised computer system and will contain a computer-generated unique document identification number.
Any communication without a number would be invalid. “All old notice will be decided upon by October 1,” she added. All new notices will be disposed of within three months from the date of reply from October 1.
Despite a cut in projections in the Union Budget, thanks to lower-than-expected realisation, revenue is estimated to grow 25 per cent. The gross actual total (direct plus indirect) tax collection in 2018-19 fell short by Rs 1.7 trillion or 7.5 per cent of the Revised Estimates for the year.
With slowdown across consumer durables and non-durable segments, tax officials appear less of achieving the target this year.
The government is expecting a tax buoyancy rate of 1.2 in direct taxes, which means that if the economy expands by 10 per cent in nominal terms, the tax collection will grow by 12 per cent.
Growth in 2018-19 (FY19) had slumped to a five-year low of 6.8 per cent and a 20-quarter low of 5.8 per cent in the January to March quarter of FY19.
Subdued revenue collection in the goods and services tax (GST) also poses a challenge, with a growth target of 16 per cent for the Central GST (CGST) in FY20.
The CGST collection target was revised downwards to Rs 5.26 trillion for the fiscal year from the Rs 6.1 trillion estimated in the Interim Budget, following a 9 per cent shortfall in collection in the previous year.