Millennium Post

Gross tax mop-up falls short by Rs41k crore against FY13 Budget estimate

The gross tax collections fell short of the budget estimates of Rs 10.77 lakh crore by Rs 40,893 crore in the last fiscal due to economic slowdown.

‘Although there was an excess collection under service tax, it failed to compensate for the fall in these two taxes (corporate tax and excise duty)...The shortfall on account of taxes was mainly due to slower pace of GDP growth than expected at the beginning of the financial year,’ a Finance Ministry document said.

However, the overall gross tax revenues in 2012-13 showed a growth of 16.6 per cent over 2011-12 actuals while in the Budget, these were estimated to grow by 21.2 per cent over 2011-12 actuals.

Due to the economic slowdown, the actual corporation tax collection in 2012-13 was at Rs 3,56,326 crore, up 10.4 per cent year-on-year as against 15.6 per cent estimated in the Budget.

‘This is primarily due to the effect of economic slowdown from mid 2011-12 especially in the last quarter of 2011-12 and continuing in 2012-13 that impacted the profitability and the expectations of corporate tax payers.

‘The shortfall in corporation taxes is one of the most important components in the overall shortfall in gross tax revenues in 2012-13, at 41.3 per cent of the total shortfall,’ the document added.

Taxes on income other than corporation taxes were budgeted at Rs 1,89,866 crore, 15.4 per cent over the actual collection in 2011-12, assuming that rationalisation proposed in 2011-12 would increase the compliance and the dividends of increased compliance would be available by 2012-13.
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