The Hindu Business Line : Difficult year for tax collections

Hyderabad Aug. 7 The current fiscal may be a difficult year in terms of tax collections as a fall-out of the economic downturn, according to Mr V. Sridhar, Chairman of Central Board of Excise and Customs.

There has been a significant fall in exports and imports in the last six months, with import duty collections on crude oil and diesel taking a hit of about Rs 22,600 crore, he said while addressing a seminar on Service Tax here on Friday. He appealed for stronger tax compliance to deal with the downturn.

Challenges & GST

He highlighted the challenges involved in implementation of GST by the Centre and State Governments, with sub-groups of the Empowered Group of Finance Ministers working on the various issues related to the new tax regime.

Among the issues to be sorted out are the threshold limits for Central Excise and Service Tax, possible explosion of the number of assesses and the attendant manpower requirements for the roll out of GST.

Mr Sridhar estimated that initially after the roll out, the number of central assesses could increase three-fold from the current level to 30 lakh.

“As there will be fresh manpower requirement, we have to opt for risk-based assessment, which is a complicated process. We need new risk parameters to track defaulters,” he pointed out.

He said there had been appeals for Central Excise exemptions on alcohol and tobacco products and the Centre was considering it. “Of course this is still a thought process and no view has yet been taken on it,” he said.

Responding to a query from one of the participants, Mr S.S. Khan, Member, Central Board of Direct Taxes, said the suggestion of acceptability of scanned copies of returns through e-mails instead of sending hard copies by post to the centralised processing centre was not feasible.

This is because there are more than 4 million assesses in the IT department and storing such huge data in image form is practically difficult, given the shortcomings in the existing IT infrastructure.

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