Govt To Miss Tax Targets Lose Over Rs 40K Cr - Dec 11, 2008

At a time when the government is busy pump priming the economy to try and retrieve some amount of growth, its own balance sheet is going for a toss. The indirect tax collections, which account for almost 35 per cent of the total government revenue, are being hurt the most. The government is losing money to help the economy and the taxmen are having a nightmarish year. Now its almost certain that the government will miss the indirect tax collection target.

PC Jha, Chairman, CBEC said that after the post budget duty rate cut, the total impact is Rs 40, 475 crore. That''s a lot of money over 12.5 per cent of the government''s estimate of Rs 3,20,000 crore for the financial year about Rs 22,000 crore is already lost on account of abolishing import duty on crude. This means that collections from excise customs and service tax will almost slide below last year''s level of about Rs 2,80,700 crore.

The growth for excise collections has been a dismal 0.6 per cent against the target of 9.6 per cent, with the only relief coming from service tax collections, which have grown at 32 per cent against a target of 26 per cent. The headline excise rates have already been slashed by six per cent in the last seven months and NDTV also learnt that there is equal pressure to hike headline customs duty, which was cut, to 7.5 per cent in this year''s budget.