Revenue mop-up short, FM orders new drive

Facing a Rs 7,700 crore shortfall in tax collections from excise and customs, the Finance Ministry has decided to pull up all field staff to...

Facing a Rs 7,700 crore shortfall in tax collections from excise and customs, the Finance Ministry has decided to pull up all field staff to up tax collections in a drive that has never been seen before.

Finance Minister P. Chidambaram is personally overseeing the new tax drive being finalised by the chiefs of the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs. The blue print for gearing up the ministry’s drive includes, for the first time, road shows for a street-to-street survey all over the country to identify new service tax payers to be launched later this month. Target: One lakh new assessees in the service tax net.

Under the new plan being readied in North Block, performance of tax officials will be reviewed every month, based on tax collections, including arrears pending from previous years. Control rooms at the level of the central boards will be set up in North Block to monitor tax collections starting from field staff in ranges to Commissioners and Chief Commissioners.

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What is worrying the Finance Ministry is that while direct tax collection is on course, it is the very modest excise and customs collections at 9.5 per cent over last year’s level which goes against the trend of a healthy growing economy acroos major sectors.

Specific instructions have been sent out to field staff like:

• Arrears not covered by any restraint in the form of stay orders, disputes or BIFR registration, should be recovered within the next 60 days

• Appeals before Commissioner (Appeals) should be promptly disposed off and within 30 days

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• In case of stay sought in disputed tax calculations, parital prior deposits (as specified by Section 35F of Central Excise Act should be insisted

• Top 20 commodities yielding excise revenues to be identified and tracked whether production and excise collections match

• Joint Commissioners in the field to scrutinise monthly/quarterly returns of assessees which pay excise duty above Rs 5 crore, and assistant commissioners to scrutinise assessees paying duty between Rs 1 to 5 crore

• Special watch on largest exporters and importers for any under invoicing

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The Finance Ministry has been perturbed over revenue shortfall on some key items which have led to a loss of Rs 7,689 crore — Rs 7,492 crore in loss of excise duty and Rs 197 crore in customs.

However, robust corporate and income tax collections during the first seven months have shown a hike in the Centre’s direct tax mop by about 34 per cent, raising the hopes of meeting the fiscal deficit target of 4.4 per cent of GDP this year.

The FM has set a target of 25 per cent increase in tax revenue and getting slippages on the indirect tax front could hold the key.