Gross tax collections declined to Rs 91,646 crore between April 1 and May 23, compared to Rs 1.05 trillion in the corresponding period of FY20. Refunds worth Rs 16,242 crore were issued during this period, a 68 per cent fall compared to the Rs 51,655 crore disbursed last year.
“Collections from direct taxes has been dismal, but with lower refunds, the net revenue position of the government is fairly positive at the moment. However, with even the central bank talking of negative growth this fiscal year, we have to relook the Budget
targets,” said a government official.
In the coming months, even net collections are expected to come under pressure once the base effect wears off.
The RBI had on Friday said India’s GDP growth
would be in negative territory in FY21, owing to the disruption in economic activity.
The tax department missed the downward revised target for direct tax
collections for FY20 by Rs 1.42 trillion, to achieve Rs 10.27 trillion — an over 9 per cent yearly fall. Growth of 28.2 per cent would now be needed, against the assumed rate of 12 per cent in the Budget, to meet the collection target of Rs 13.19 trillion.
Refunds worth Rs 52,491 crore in about 40,000 cases are pending. These pertain to cases picked up for scrutiny or pending at the end of assessing officers.
Of those, about Rs 36,155 crore of refunds are stuck because these cases have been picked up for scrutiny.
Close to Rs 16,336 crore of refunds, involving 20,500 cases, are pending with assessing officers.
“There has been no administrative instruction to clear refunds in cases picked up for scrutiny, or those pending at the assessing officers’ end,” said a government official.
from tax deduction at source (TDS) fell 22 per cent up to May 10, the last day for TDS
payments, indicating large lay-offs and salary cuts in April, besides stagnant rental activity.
collections stood at Rs 44,110 crore between May 1 and May 10, as against Rs 56,447 crore mopped up in the same duration last year.
FY21 revenue projections were based on an assumed nominal GDP growth
rate of 10 per cent, which means tax buoyancy of 1.2. The Economic Survey had pegged real GDP growth at 6.0-6.5 per cent for FY21, which is unrealistic now.
The IMF has cut India’s growth forecast for FY21 in its World Economic Outlook report to 1.9 per cent, from 5.8 per cent projected in January.