Direct tax share crossed 4% in 2004-05

For the first time in the last 35 years, direct tax contribution to GDP crossed 4 per cent in 2004-05, the outcome Budget 2006-07 said today.

Presented in Parliament, the document measures government performance. It reveals that the cost of collection of direct taxes has drastically come down from 1.36 paise per rupee in 2000-01 to 0.86 paise per rupee in 2004-05. It added that the initial trend of revenue collection in VAT implementing states was quite encouraging.

Meanwhile, the performance budget for 2005-06, also presented in Parliament today, said the estimated contribution of indirect taxes to GDP would decline to 5.4 per cent this fiscal against 5.5 per cent during 2004-05.

While customs duty's contribution to GDP is estimated to decline to 1.5 per cent from 1.8 per cent, excise duty is estimated to rise to 3.4 per cent from 3.2 per cent and services tax to remain stagnant at 0.5 per cent.

The Central Board of Direct Taxes, which is moving towards e-delivery of tax payer services, will provide online services like tax-related information including forms, filing of application for permanent account number and obtaining of PAN, filing IT returns and paying taxes and tracking their states. The services will also include refunding credit to tax-payers' bank accounts.

The board has operationalised certain other e-tax initiatives like tax information network, online tax accounting system, computerisation of TDS functions and annual information returns.

The Central Board of Excise and Customs is implementing a Rs 165-crore project to consolidate the customs, excise and service tax services and bring them under a single network, to set up a data warehouse and a disaster recovery site.

A risk assessment software is also being developed for identification of potential duty evaders and smugglers, according to the outcome budget.