JOIN USWith less than two months remaining for the fiscal year 2013 to end, Finance Minister P Chidambaram on Tuesday said India’s indirect tax collections may fall short of budget target.
"This has been a difficult year for tax collection too. As the economy slowed down, imports also slowed down, manufacturing too was subdued and therefore collections have been affected," he said.
Chidambaram, however, asked tax officials to shift to technology-driven regime instead of following "heavy handed" tax administration.
“As we go forward, we should rely more on technology, non-intrusive intelligence gathering, and a non-adversarial tax administration. Once the tax payer is confident that the relationship between a tax payer and officer is not a hostile relationship, you will find more and more people have become compliant to tax laws," he said.
The Central government has budgeted to collect over Rs 5.05 lakh crore in the current fiscal from indirect taxes that comprise excise, customs and service tax.
However, tax revenues have increased at slightly lower pace in the current year as compared to the fiscal 2011-12. The official data suggests that while the growth in excise duty collections has been much higher in the current year, customs revenue growth has been at half the rate seen in the previous year. Service tax collection has, however, maintained the pace of 2011-12.
Slow growth in industrial output, slackening export orders and a slowing manufacturing seector have had an adverse impact on India’s overall economic growth this year.
India’s economy grew 5.4 per cent in the first half of the current fiscal, lower than 7.3 per cent a year-ago. It is likely to grow by 5.7 per cent in the current fiscal, which would be a decade's low.
The latest HSBC PMI data shows that the growth in India’s manufacturing slowed to a three-month low in January, as new export orders lost momentum. A slowdown in India’s manufacturing poses a risk to the already flagging economy.
The most recent official data showed that India’s industrial output grew only in three months in the current fiscal till date.
In November, it shrank 0.1 per cent from a year earlier as exports fell for eight months in a row.