NEW DELHI: With the government staring at a substantial tax revenue deficit this fiscal year, sources say it is banking on tax dispute settlements and a strict recovery process to mitigate the shortfall. “There will be a tax shortfall, but we are trying our best to get the maximum out o the Vivaad se Vishwaas scheme. Even by conservative estimates, we expect to add at least Rs 1 lakh crore to the kitty in this fiscal year,” a senior official from the finance ministry told this publication.
According to sources, as of November 17, the Centre has garnered Rs 72,480 crore so far through the direct tax dispute resolution scheme. They also said that the Income Tax Department has also received a total of 45,855 declarations until November 2020 worth Rs 31,734 crore under the scheme.
The revenue department has also come down heavily on tax evadors. “In the last two months, we have successfully detected multiple tax evasion cases. We expect that through the continuous effort of the department we will end up much better than expected,” the official said.
Meanwhile, finance ministry sources say that in the first six months of the fiscal year (April-September), the government’s gross tax collection has fallen by 27.5 per cent to Rs 7.2 lakh crore against Rs 9.2 lakh crore recorded in the corresponding period of the previous year.
Despite a surge in October GST collections, the central government is still staring at a substantial shortfall in tax revenue. According to Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP, “In comparison with the previous year, we can expect the final shortfall figure to be around 22 per cent to 25 per cent by the end of the FY. The scenario is no different on indirect tax front as well; however, the margin is low at overall shortage of 12 per cent when compared with the previous year.”
Diving revenues, soaring expenses hit fiscal deficit