In the wake of apprehension over indirect tax collections falling short of the revenue target, Finance Minister P. Chidambaram, on Tuesday, exhorted CBEC (Central Board of Excise and Customs) officials to make their best efforts to get as close as possible to the budgeted figure in the remaining weeks of the current fiscal, but in a non-adversarial approach.
Addressing CBEC officials at a function organised here to mark the annual investiture ceremony for conferment of ‘Presidential award of appreciation certificates’, Mr. Chidambaram admitted that the worry over lower-than-budgeted tax collection was mainly because the current fiscal had been a difficult one with low imports and subdued manufacturing activity.
Short of budget target
“There is, of course, apprehension that you may fall short of budget target…This has been a difficult year for tax collection too. As economy slowed down, imports also slowed down, manufacturing too was subdued and, therefore, collections have been affected. But, nevertheless, in the remaining seven weeks or so you must make efforts to achieve the budgeted target,” he said.
Against a budgeted revenue target of over Rs.5.05 lakh crore in 2012-13 through indirect taxes by way of excise, customs and service tax, the collections during the April-November period saw a moderate growth rate of 16.8 per cent — against the annual growth target of 27 per cent — and stood pegged at a mere Rs.2.92 lakh crore.
Partly to blame for the low collection was the fact that the growth in industrial production in November, 2012, shrank 0.1 per cent and imports in the first nine months of the fiscal year slipped by 0.71 per cent to $361.2 billion. Alongside, economic growth during the first half of 2012-13 was a mere 5.4 per cent, way lower than the 7.3 per cent expansion posted in the previous fiscal.
Despite these odds, however, Mr. Chidambaram asked taxmen to abandon the ‘heavy-handed’ tax administration and shift to a technology-driven regime. The shift in tax administration system, he said, would not be smooth but that path cannot be abandoned. “We cannot abandon that path. As we go forward, we should rely more on technology, non-intrusive intelligence gathering, and a non-adversarial tax administration. Once the tax payer is confident that the relationship between a tax payer and officer is not a hostile relationship, you will find more and more people have become complaint to tax laws.”
Speaking on the occasion, Revenue Secretary Sumit Bose said that all efforts would be made to stick to the path of fiscal prudence clearly laid down by the government. “We will collect taxes in just and fair manner. We will stick to the fiscal targets that the government has fixed for us. We will collect revenues, but again in a just and fair manner,” he said.
The government is committed to containing the fiscal deficit at 5.3 per cent of the GDP (gross domestic product) in the current fiscal and proposes to bring it down further to 4.8 per cent in 2013-14.