"Realising taxes is not so easy." This is the current jibe at North Block, the power centre when it comes to finances of the central government. With just four days left for the financial year to end, both direct and indirect tax divisions of the finance ministry are struggling to meet the daunting revenue collections target.
As on March 25, the direct tax collection stood at Rs 10.23 lakh crore as against the revised target of Rs 12 crore, said sources familiar with the matter, adding that indirect taxes, especially the goods and services tax (GST) collection for March is also growing at a slow pace but the government is hopeful that the figures might cross Rs 1 lakh crore mark.
"Revenues are growing at a slow pace. The centre expects a revenue shortfall of about Rs 1 lakh crore keeping in account both direct and indirect taxes from the revised targets that were presented during the budget," sources told CNBC-TV18, requesting anonymity.
The government had revised its direct tax collection target to Rs 12 lakh crore from Rs 11.5 lakh for the fiscal. It had also revised indirect tax collection target to Rs 9.45 lakh crore from 10.45 lakh crore.
"The slow-paced growth of revenue collections have definitely raised fresh concerns for the revenue department. Both revenue secretary and finance minister are taking an update on the collection almost twice a day, keeping a close watch," the sources added.
Notwithstanding such a situation, as on date, the government estimates hint at a revenue shortfall, however, it is hopeful to reduce this as maximum revenue realisation takes place only towards the end of the month.
"March is not just closing of the quarter but is also closing of yearly operations and finances. This activity takes time and thus, taxpayers usually file their taxes only in the last few days of the month. Thus, we expect the numbers to pick up by March 31," a senior government official monitoring the numbers said.
Meanwhile, on indirect taxes, the government has reached out to field formations to assist people in the early filing of their GST returns. On the other hand, for direct taxes, revenue secretary Ajay Bhushan Pandey on March 26 approached CEOs and MDs of banks to credit TDS (tax deducted at source) before March 31.
"In a letter to Indian Banks' Association (IBA), CEOs and MDs of public and private sector banks, Pandey has requested them to credit the TDS collections for this quarter before March 31 so that they can help in revenue mobilisation," the sources added.
However, its a wait and watch situation and let's see what are the final figures that the government announces in April.
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