Measures to garner tax revenue appears to be yielding results as the direct tax collection has touched the revised direct tax collection target at Rs 6.32 lakh crore in FY14. Revenue authorities made intense efforts to collect direct taxes including personal income tax, corporate tax and wealth tax especially from non-filers of returns.
The Central Board of Direct Taxes (CBDT) had launched a number of searches and survey operations across the country to clamp down on cases of tax evasion which has resulted in a number of entities declaring their hidden incomes and remitting the money in government treasury. The revenue department’s business intelligence identified 2.1 million potential non-filers and sent 50,000 letters in the first phase, while, more such letters were sent in phase two.
However, indirect tax collection is likely to remain below set revised indirect tax collection target at Rs 5.19 lakh crore for FY14. Indirect tax includes customs/import duty, excise duty and service tax. The collection is unlikely to cross Rs 5 lakh crore during FY14 as slowdown in manufacturing and lower growth in services have affected collection of excise and service taxes. India’s indirect tax collections grew by only 5.6 percent to Rs 4,41,826 crore during the April-February period of current fiscal as against Rs 4,18,286 recorded in the same period of previous fiscal. Meanwhile, with increased focus on revenue generation from service tax, the government has detected several cases of tax evasion amounting to about Rs 8,000 crore during FY14 fiscal by a number of small and big service providers across the country through non-filing of mandatory returns or wrongful declaration of amounts.