Although the exact figures have not come in, indications are that the government has exceeded the revised target for indirect tax collections in 2012-13 and has met the overall revised revenue targets, balancing the small shortfall in direct tax collections.
“We have exceeded the revised estimates in indirect tax,” Revenue Secretary Sumit Bose said at an interactive session with the members of the Bengal Chamber of Commerce and Industry here on Friday.
The exact numbers may be known only after the third week of this month. The revised indirect tax collections target for 2012-13 was Rs.4.6 lakh crore, while the total revised revenue target was Rs.10.3 lakh crore.
Mr. Bose said the government was close to direct tax collection’s target, indicating that the target might have been missed. “But combining (indirect and direct tax), we have met the target,” he said.
He said that the early introduction of the Goods and Services Tax (GST) would have positive impact on gross domestic product (GDP), exports and employment.
The Union Finance Ministry was planning to set up the fifth large taxpayer unit (LTU) in Kolkata by June, he said, adding that the LTU was expected to provide specialised services to large tax payers of the eastern region. He also said the trend in tax to GDP ratio appeared to have been stable in 2012-13, being maintained at the 2011-12 level of 6.43 per cent.
“Many of the States have done well in tax collection, and this is largely due to use of information technology,” he added. According to Mr. Bose, the ratio of the combined gross state domestic product and tax collection improved in the past few years due to the extra efforts mounted by the States.
With the government aiming to reclaim its peak tax-GDP ratio of 11.9 per cent soon, the Revenue Secretary said that boosting corporate tax collection was key to improving the crucial ratio.
Mr. Bose said that high economic growth was the ‘remedy’ for improving the low tax-GDP ratio as only high growth would ensure higher corporation tax collection.