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Govt expecting very robust tax revenue this fiscal: Revenue Secretary Tarun Bajaj

The govt. is focusing on bringing more people under the tax net rather than increasing the tax rate

August 11, 2021 03:32 pm | Updated 03:32 pm IST - New Delhi

Revenue Secretary Tarun Bajaj. File

Revenue Secretary Tarun Bajaj. File

The government is expecting a “very, very robust” tax revenue in the current fiscal on the back of better-than-expected corporate sector performance, Revenue Secretary, Tarun Bajaj, said on August 11.

Acknowledging that high GST rates are impacting the automotive sector, Mr. Bajaj said that the GST Council would look at solutions to bring down the rates, take out certain items from the tax-exempt category and correct the inverted duty structure.

“It is not that we have increased the taxes, or we have become more intrusive and we are coming to you asking to pay more taxes... the happy thing behind this is, perhaps the corporate sector is doing better than what we had anticipated it to,” Mr. Bajaj said at a CII annual session.

The net direct tax collection in the April-June quarter of the current fiscal stood at over ₹2.46 lakh crore, as against over ₹1.17 lakh crore collected during the same period last fiscal (2020-21).

Net Indirect Tax (GST and Non-GST) revenue collection in the June quarter of current fiscal was at ₹3.11 lakh crore.

Net GST collection during the quarter was over ₹1.67 lakh crore, which is 26.6% of the budget estimate of ₹6.30 lakh crore for full 2021-22 fiscal. The net GST collection includes Central GST + Integrated GST + Compensation cess.

With regard to Goods and Services Tax (GST), Mr. Bajaj said there are a lot of items on which tinkering of tax rates might be needed, but there is a need to first stabilise the regime.

Asking private companies to invest more, Mr. Bajaj said, “I don’t see private investment happening that much... for a sustained and long-term growth of the economy we want you people to come forward to invest, manufacture, start services and please tell us what is it that you require from us,” he added.

Last week, the government brought in a bill, which seeks to nullify retrospective tax demands raised on companies. The bill proposes to scrap the tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but their business assets remained in India.

The 2012 legislation was used to levy a cumulative of ₹1.10 lakh crore of tax on 17 entities, including the U.K. telecom giant Vodafone, but substantial punitive action was taken only in the case of Cairn.

The Taxation Laws (Amendment) Bill, 2021 seeks to withdraw the tax demands made using a 2012 legislation on the indirect transfer of Indian assets and also refund the amount paid in these cases without any interest.

On raising the tax to GDP ratio, Mr. Bajaj said hiking rates to increase tax collection was not a solution. Instead, the tax-base has to be expanded to bring more people under the tax net.

“The increase in tax buoyancy in current year is also as a result of certain quiet steps taken by I-T department,” he said, adding that the government is trying to rope in a large part of informal sector, or non-corporate and non-salaried sector by bringing in some of their transaction or businesses into focus.

“I am actually looking forward to expanding that effort. I don’t want to tax the corporate sector which already pays taxes in the country, and contributes a major part of taxes in the country,” he added.

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