The moderate growth in advance tax mop-up has dashed the finance ministry?s hope of meeting the direct tax collection target of R5.32 lakh crore in the current fiscal. In the first three quarters, the advance tax collection rose by just 11.5% to R1.75 lakh crore, taking the total collection to R3.20 lakh crore till December 19. This is a growth of only 8.75% over the year-ago period.
A growth of 35% is required in the remaining three months of the current financial year to achieve the Budget estimate. In the beginning of this fiscal, a growth of 19% was needed to achieve the target.
According to a finance ministry official, it is unlikely that the direct tax collection target would be met as business sentiments are down and the economy sluggish.
The advance tax collection was worst hit in the October-December quarter when mop-up from the country?s top 100 companies stood at over R30,000 crore, down 1.4% over the year-ago period.
In the corresponding quarter last fiscal, the advance tax payment by the top 100 companies rose 18%, while the growth was just 10% in the second quarter of the current fiscal.
The flat growth in advance tax outgo was in sync with the 5.1% drop in industrial output in October and a muted growth in indirect tax collection. The excise duty collection for November contracted 6.5% to R11,761 crore as compared to the year-ago period. This was the second month in the current fiscal when there was a fall in the excise mop up. Overall, the indirect tax mop-up grew 6.5% to R31,082 crore in November this year.
