Direct tax collection to be over Rs 3.04 lakh cr for FY08

Written by Economy Bureau | Mumbai, Mar 28 | Updated: Mar 30 2008, 03:24am hrs
Finance minister Palaniappan Chidambaram said Friday that the direct taxes collections during 2007-08 are expected to surpass the revised estimates of Rs 3,04,445 crore by a few thousand crore. Tax revenues have increased by over 40% due to increased tax compliance. Chidambaram was speaking at the inauguration of the countrys third Large Taxpayer Unit (LTU) at the World Trade Centre in South Mumbai that has been set up at a cost of Rs 74 crore.

Chidambaram said that the direct tax collections for the 2008-09 fiscal has been fixed at Rs 3,65,000 crore (Rs 1,000 crore collection per day). He also noted that over a period of time, salaried income should be treated differently.

The minister said that LTU demonstrated an attitudinal shift in the tax administration policy and has called upon the corporates to avail of the single window service, which will result in substantial transaction cost saving for the business houses.

He said that Mumbai, which accounts for nearly a third of direct tax collections, has the potential for at least 150 large tax payers to join the LTU.

The minister said that the LTU is expected to provide a different kind of service of higher quality to the more important customers and clients of the tax department.

Chidambaram said the unit would serve as a single-window facility for all matters related to central excise duties, service taxes, corporate and income taxes for all large tax payers who have paid at least Rs 5 crore in excise or service tax or Rs 10 crore in income tax in the previous years.

He said that at present 18 large companies have already registered at the Mumbai unit. These include the Rashtriya Chemical and Fertilizers (RCF), Union Bank of India, Bank of India, Cipla, Bayer India Limited and Wyeth. A senior income tax official, however, noted that major corporates from the realty and oil and gas sectors have so far not come forward. But a few foreign banks including Standard Chartered have shown interest in registering with the Mumbai LTU.