Finance Minister Arun Jaitley today held a high-level meeting with the heads of Central Board of Direct Taxes or CBDT and Central Board of Indirect Taxes and Customs (CBIC) to assess the revenue collection situation as both the direct and indirect tax revenue numbers fell short of their target for the financial year 2018-19, sources in the finance ministry told Financial Express Online. Economic Affairs Secretary S C Garg and Revenue Secretary A B Pandey were also present at the meeting.
The shortfall in revenue concerns the ministry as it would also impact its fiscal deficit target of 3.4% of the gross domestic product for 2018-19. The government will have to make up for the revenue gap by decreasing expenditure, higher disinvestment proceeds and other non-tax revenue collection. Notably, the government’s disinvestment mop-ups have exceeded the original target of Rs 80,000 crore with the overwhelming response from the second tranche of CPSE ETF in mid-March and proceeds from REC-PFC merger.
However, the government seems to be confident about achieving the fiscal deficit target of 3.4% as Finance Secretary Subhash Chandra Garg had said that the government would stick to its fiscal deficit target for FY19 after the borrowing meet on Friday got over. Finance Minister Arun Jaitley also said the government is fairly at the target in an interview with ET NOW.
In the interim budget for 2019-20, the government had revised its fiscal deficit target upwards to 3.4% of GDP. Earlier it had pegged a target of 3.3%.
As on March 31, the direct tax collection is being estimated at Rs 11.50 lakh crore as against the revised target of Rs 12 trillion for FY 19. The indirect tax collection revised target for FY19 was Rs 10.45 lakh crore but the actual collection is seen to be short by around Rs 30,000 crore. Due to low GST collection, the government had cut its GST target to Rs 6.44 lakh crore from Rs 7.44 lakh crore in the interim budget.
“The final numbers of the tax figures would come on April 4 as the late entries get reflected after some days. We will reach the original target of Rs 11.50 lakh crore,” a senior tax official told Financial Express Online.