NEW DELHI: The shortfall in direct tax collection target is now pinching the corporates. They have come under pressure from tax officials who are asking companies to pay more as last installment of advance tax so that gaps in targeted collection could be narrowed. Besides, various commissionerates of the income tax department want companies to pay more tax, over and above the amount they have shown in their returns. The last date to pay final installment of advance tax is March 15.
The extra efforts by the department are on account of muted collection in direct taxes so far this fiscal.
The direct tax mop-up until January has grown by a mere 9.28% to R3.46 lakh crore, well below 19% growth required to take the collection for the full fiscal to the budgeted level of R5.32 lakh crore for 2011-12. This means the finance ministry was to mobilise up to R1.86 lakh crore to achieve the target in the last two months of the fiscal.
The pressure on the income tax officials was put by the central board of direct taxes (CBDT) to collect as much as taxes as possible in the remaining two months of the fiscal. In a letter written to chief commissioners last month, CBDT chairman Laxman Das had said that every commissioner and chief commissioner should ensure their targets are achieved. The CBDT had said that achieving target would be one of the key parameters on which appraisal of tax officials would depend.
The income tax department’s problem has also been accentuated as I-T gazetted officers have gone on strike from last 2-3 months in demand for promotion. It has paralysed all search and survey operations conducted by the department and thus affected revenue moblisation.
According to one of the income tax commissioner, long working hours, frequent meetings and close look at tax payers assessment are usual these days. “We have to come close to our target as we don’t want our appraisal to be affected,” he said. The issue of asking for unreasonable tax demands has also been highlighted by the parliamentary standing committee of finance in its Direct Taxes Code (DTC) report. It had said that unreasonable tax demands raised and adjudicated, if finally quashed at higher levels, should be adversely reflected in the career dossier of the concerned officials.