Advance tax collection
after the third instalment stood at Rs 2.51 trillion compared with Rs 2.47 trillion in the corresponding period last year.
“Gross direct tax collection
has touched Rs 8.34 trillion to date compared with Rs 7.96 trillion in the same period last year. Net tax collection is around Rs 6.75 trillion as compared with Rs 6.7 trillion in the same period last year,” a government source said.
On the other hand, growth in refunds showed increased 26.6 per cent compared with that in the same period last year.
The collection figures state there is a need for cuts in direct tax collection
targets at least for the corporate sector. It is also disturbing because the Centre’s fiscal deficit
has crossed the target for 2019-20 by 2.4 per cent by October itself.
“Overall revenue mobilisation is facing heat. We have yet to do concrete analysis of the slowdown but it is difficult to say that it is only because of the rate cuts. Other factors such as the stimulus package, especially on the tax side, have played a significant role in this,” said a source cited above.
The government reduced the corporation tax rate for existing and newly incorporated companies to 25 per cent and 15 per cent, respectively, in late September, after the September 15 deadline for advance tax payment was over. However, many companies have not yet taken a call on the new rate structure.
The official data released by the government showed the country’s gross domestic product
(GDP) growth in the July-September quarter of 2019-20 slowed to a 26-quarter low of 4.5 per cent.
About 45 per cent of collection comes from advance tax and the rest from TDS (tax deduction at source) and others.
Advance tax is filed by the 15th of the third month of every quarter. Assessees falling within the ambit of advance tax payment are required to pay 15 per cent of the calculated tax liability in the first quarter, 25 per cent in the second, and the rest in equal instalments in the remainder of the year.