Economic decline and tax collection
It has been widely reported that there is a major shortfall in direct tax collections in the last fiscal – actual shortfall could be in the region of Rs. 60,000 crores (PTI release 16.2.09). If anyone had followed last year’s high tax payers they were led from the front by banks with very high declared profits followed by various industry blue chips. This year the shoe is on the other foot, direct tax collections are down which directly points to the fact that recession has also hit India. Mr. Kamal Nath (Industries Minister) may digress so may the Finance Minister, but the tax collection speaks for itself! Instead of accepting that there is a shortfall in collection due to recession, the Government has given instructions to the revenue arm to carry out surveys to increase the collection. We now have various revenue arms of the Central and State Governments calling on industry – like the Income Tax department, the Customs, the VAT authorities, etc. What happens in such cases? Does th...