NEW DELHI : Unlike previous years, companies feel less pressure to pay pending dues, as the government has exceeded its revenue targets for the current financial year.
Usually, corporations get incessant calls from jurisdictional officers requesting cash payments to meet tax obligations at the year-end. According to sources, upcoming Lok Sabha elections could also be one of the reasons. “There is a shift in usual end-of-year tax dynamics. Usually in March, there is a push to find places where the Centre may not be collecting all the money it should be, like through missed taxes or loopholes in the system to ensure that the government meets its revenue goals by the end of the financial year,” a top source said who didn’t wish to be identified. For once, revenue intelligence officers investigating pending GST matters are granting corporations breathing space, refraining from pressing for ad hoc tax payments, as per him.
“This can be attributed to the fact that the government has surpassed its tax collection targets for FY24. This is a clear sign of maturity of the tax administration which seems to have realised that ad hoc payments in one year result in refunds in later years along with interest, and is therefore not a fruitful exercise. Refunds have become expeditious in the past few years. In addition, elections could also be one of the reasons,” another source added.
Total tax receipts in FY24 till January has been Rs 27.06 lakh crore as compared with Rs 23.62 lakh crore in FY23. The average monthly gross goods and services tax (GST) collection for FY24 has been Rs 1.67-lakh crore so far, exceeding the Rs 1.5-lakh crore collected in the previous year’s corresponding period.
The net direct tax collections stood at Rs 18.9 lakh crore from (April 1, 2023 to March 15, 2024) compared to Rs 15,76,776 crore in the corresponding period of the preceding financial year, an increase of 19.88%, according to the date released by the Central Board of Direct Taxes (CBDT). The net direct tax collection of Rs 18.90 lakh crore includes corporation income tax (CIT) at Rs 9,14,469 crore (net of refund).
Meanwhile, as per sources, the Centre may also increase revenue collection targets for the next financial year by 3%. In the interim budget, it was announced that the tax receipts would grow by 12% to Rs 26.02 lakh crore in FY25.