With indirect tax revenues falling way behind the target, Prime Minister Narendra Modi has decided to closely monitor the collections.

Indirect tax collection during April-December grew by meagre 6.7 per cent as against the Budget target of 25.8 per cent.

In a communication to all the Chief Commissioners of the Indirect Tax wing of the Tax Department, Chairman of the Central Board of Excise and Customs Kaushal Srivastava, said: “Tax collections are being closely monitored by the Prime Minister who has desired that all out efforts should be made to achieve the Budget estimate.”

Indirect tax consists of Custom Duty, Central Excise Duty and Service Tax.Terming the target as ‘challenging’, Srivastava said he had visited various zones, along with the Revenue Secretary, and interacted with officers. “In addition, the members and I will also be regularly reviewing the revenue performance and augmenting efforts by the zones by visiting or through video conferencing,” he said.

Urging tax officials to pursue revenue augmentation measures with full vigour and commitment, he said officials should ensure that all taxes due to the Central Government are collected in a fair, judicious and non-adversarial manner.

Both the direct and indirect tax boards have issued a circular on November 7, 2014 to facilitate tax payers and promote non-adversarial administration. The officials have been asked to prepare a detailed analysis of collection till December.

Analysis of shortfall

This will include comparison with previous year, reasons for shortfall or gain along with sectoral analysis, projection from various Additional Revenue Measures (ARMs) and projections for the current year. Officials will prepare monthly report for February and March.

Additional revenue measures include adjudication of pending cases, recovery of arrears (including efforts in coordination with agencies such as Financial Intelligence Unit or FIU, Registrar of Companies and CBDT), revenue from Voluntary Compliance Encouragement Scheme (VCES) arrears, disposal of confiscated goods and action against defaulters or late filers. It is estimated that indirect tax collections are likely to see a shortfall of over ₹70,000 crore. This is despite duty on petrol and diesel being hiked four times since November which is expected to give around ₹20,000 crore. The duty hike on edible oil is likely to garner up to ₹1,000 crore.

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