<div align="justify">As the government stares at a huge shortfall in direct tax revenue this financial year, it may revise downward the lofty Budget target of Rs 9.8 lakh crore.<br /><br />“The tax revenue itself is slow due to slowdown in the economy and the impact of GST. Refunds are a major spoiler in the second half. There may be a downward revision of the Budget target,” an official told DH on condition of anonymity.<br /><br />The government is expected to release the economic growth figures for the second half (July-Sept) of the current fiscal on November 30. The revision in tax collection target may also come around that time. <br /><br />The companies had halted production and resorted to de-stocking ahead of GST. That not only impacted the indirect tax revenues but also advance income tax collections from them.<br /><br />The tax department is under pressure to shore up revenues through enhanced collections, disposing of high value cases, scaling up searches and seizures. But likely higher refunds in the second half is a hindrance, he said.<br /><br />It is expecting a higher refund outgo than Rs 79,660 crore in the first half.<br /><br />Official data showed the April-September direct tax refund fell 7.9% as compared to the same period in 2016-17. The gross direct tax collection figures for the period were also lower at 10.3%. The net direct tax collection growth was 15.8%. A higher growth rate in net direct tax collection compared to gross receipts indicates lower refunds.<br /><br />The growth in advance tax collection this year has also been tepid. Advance tax payments by public sector enterprises has been slower than last year.<br /><br />Advance tax for corporate income tax grew 8.1% between (April-Sept), while for personal income tax it rose 30.1%. But these could be before adjustment of refunds.<br /><br />Tax collection growth usually picks up in the second half of the financial year but a higher refund may erode the base.<br /><br />Cascading effect<br /><br />* Huge shortfall in revenue may lead to slashing target<br /><br />* Slow revenue growth due to economic slowdown post GST<br /><br />* Target cut likely November-end<br /><br />* Second-half revenues may be better but refunds may erode base<br /></div>
<div align="justify">As the government stares at a huge shortfall in direct tax revenue this financial year, it may revise downward the lofty Budget target of Rs 9.8 lakh crore.<br /><br />“The tax revenue itself is slow due to slowdown in the economy and the impact of GST. Refunds are a major spoiler in the second half. There may be a downward revision of the Budget target,” an official told DH on condition of anonymity.<br /><br />The government is expected to release the economic growth figures for the second half (July-Sept) of the current fiscal on November 30. The revision in tax collection target may also come around that time. <br /><br />The companies had halted production and resorted to de-stocking ahead of GST. That not only impacted the indirect tax revenues but also advance income tax collections from them.<br /><br />The tax department is under pressure to shore up revenues through enhanced collections, disposing of high value cases, scaling up searches and seizures. But likely higher refunds in the second half is a hindrance, he said.<br /><br />It is expecting a higher refund outgo than Rs 79,660 crore in the first half.<br /><br />Official data showed the April-September direct tax refund fell 7.9% as compared to the same period in 2016-17. The gross direct tax collection figures for the period were also lower at 10.3%. The net direct tax collection growth was 15.8%. A higher growth rate in net direct tax collection compared to gross receipts indicates lower refunds.<br /><br />The growth in advance tax collection this year has also been tepid. Advance tax payments by public sector enterprises has been slower than last year.<br /><br />Advance tax for corporate income tax grew 8.1% between (April-Sept), while for personal income tax it rose 30.1%. But these could be before adjustment of refunds.<br /><br />Tax collection growth usually picks up in the second half of the financial year but a higher refund may erode the base.<br /><br />Cascading effect<br /><br />* Huge shortfall in revenue may lead to slashing target<br /><br />* Slow revenue growth due to economic slowdown post GST<br /><br />* Target cut likely November-end<br /><br />* Second-half revenues may be better but refunds may erode base<br /></div>
