Govt realises 152% target for indirect tax recovery

Customs duty evasion still high, only a third of demanded duty was realised

Author : Nivedita Mookerji/DNA

Customs duty evasion continued to be high during 2008-09, according to estimates available with the ministry of finance.

While the all-India customs duty demanded in 2008-09 was Rs 1,867 crore, only one-third of that amount around Rs 646 crore was realised. During the previous fiscal (2007-08) total customs duty demanded was Rs 1,221 crore, but only one-fourth of it Rs 338 crore was realised.

However, the collection of indirect tax arrears in 2008-09 is being seen as 'good' in the backdrop of the global economic slowdown, especially as the government realised more than it targeted.

Against a target to collect Rs 3,250 crore towards indirect tax arrears in 2008-09, the government realised Rs 4,931 crore, which works out to 152% of the target.

The arrears target for central excise was Rs 1,300 crore in 2008-09, and Rs 1,748 crore was collected. In customs duty, Rs 1,120 crore was collected against a target of Rs 950 crore. In service tax, collection was Rs 4,931 crore, even as the target was Rs 1,000 crore.

Meanwhile, the number of audits conducted across the country increased. While 30,883 audits were conducted in 2007-08, the number rose to 35,256 in 2008-09. The amount of duty detected also increased, to Rs 7,503 crore from Rs 5,101 crore, according to official data.

However, the number of cases booked for duty evasion dropped to 5,672 from 7,651 in 2007-08.

The total amount of duty involved in these cases also came down Rs 6,943 crore, against Rs 8,770 crore in 2007-08. The total amount recovered in these cases decreased from Rs 2,785 crore in 2007-08 to Rs 1,230 crore in 2008-09.

As for smuggling cases, goods worth Rs 1,479 crore were seized in 2008-09, up from Rs 1,021 crore in the previous fiscal.

Recently, the finance ministry had issued figures showing direct tax collection has increased. Collection for 2008-09 increased 8.33% from the previous fiscal to Rs 3.38 lakh crore against Rs 3.12 lakh crore in 2007-08.

Collection of direct taxes has grown over three times from Rs 1.05 lakh crore in 2003-04, translating into an average annual growth of 26.75%.

However, when considering direct tax as a percentage of GDP, India witnessed a slight decline. Direct tax as percentage of GDP stood at 6.23% in 2008-09, against 6.61% for 2007-08.