Gujarat seems to be following
Prime Minister Narendra Modi blindly. People from the state seem to have
latched on to his idea that the state does not pass on any tax to the Centre
and, in turn, does not seek any aid for it. Gujaratis seem to have taken his
statement a bit seri ously. This year, they have paid less taxes.
With the Centre likely to miss the
revised target of direct tax collection by around Rs 40,000 crore, Gujarat has
emerged as one of the worst performing states with its direct tax collections
falling short of meeting the target by more than Rs 4,000 crore.
What is even more shocking is that
among the top 18 tax defaulters in the country, 11 are from Gujarat. The 18
entities have defaulted to the tune of Rs 500 crore. For the first time, the
Central Board of Direct Taxes (CBDT) has shamed these defaulters by posting
their details on its website.
Last year, the state had met its
target of Rs 29,138 crore, but officers are doubtful if the target of Rs 34,090
crore would be met this year. The corporate tax target for the state for
2014-15 was Rs 18,820 crore with individual tax and others accounting for Rs
15,275 crore.
“There is a huge tax-to-GDP
collection gap which has led to the shortfall.Corporate tax collection is
lagging behind the target by 14 per cent. We will probe into it to find out the
reasons,“ said a senior officer from CBDT, Ahmedabad.
“Also, several big players who
operate in Gujarat have their base in cities like Delhi and Mumbai. They pay up
their taxes where their Tax Collection and Deduction Account Number (TAN) is
registered. So, Gujarat falls short of achieving its target that way,“ said the
official.
WHO ARE THE TAX DEFAULTERS
Despite repeated attempts to
retrieve tax arrears and the assesses remaining untraceable, the CBDT took the
decision to shame them publicly.
A company called Blue Information
Technology Ltd based out of Ahmedabad has tax arrears of Rs 75.11 crore. The
directors include Puri Dilip Kumar, Jhaveri D Seema and Trivedi A. Milan.Their
last known address was Salapose road, near GPO. Other companies from the state
in the list include Somani Cement with tax arrears of Rs 27.47 crore, whose
directors are B K Mishra, A K Singh and Rajesh P Somani, and they are based in
Panchmahals. Applitech Solutions (Rs 27.70 cr), whose directors are Patel Ankit
C; Parekh Jayesh A, Patel Asit N and Patel Manishbhai N are based in Shikhar
Netaji Marg, Navrangpura. Jupitor Business (Rs 21.31 cr), whose directors are
Pratik Shah, Amit N Patel and Anindoo Banerjee who are based on C G Road and
Hirak Biotech (Rs 18.54 cr), whose directors are Pratik Shah and Niketa B Dave.
The other Gujarat-based companies
which figured in the defaulters list include Icon Bio Pharma & Healthcare
Ltd (Rs 17.69 cr), Banyan & Berry Alloys (Rs 17.48 cr), Laxminarayan T
Thakkar (Rs 12.49 cr), Viraj Dyeing & Printing (Rs 18.57 cr), Poonam
Industries (Rs 15.84 cr), Kunvar Ajay Food Pvt Ltd (Rs 15 cr).
WHY THE SHORTFALL
The national budgeted target under
the direct tax category was fixed at Rs 7.05 lakh crore for 2014-15 (there was
a downward revision after budgeting Rs 7.36 lakh crore initially). However, as
per the CBDT, it has collected Rs 6.50 lakh crore (shortfall of Rs 55,000
crore) till March 30.
Experts have cited several reasons
for the shortfall in the collection including unrealistically high expectations
from corporate tax. “The target set by the government was much higher than a
reasonable amount so it is natural that it will lead to such a huge shortfall.
They had relied too much on corporate tax. In fact, in the budget also finance
minister had stated that they will have low collections,“ said Mukesh Patel,
tax consultant.
“Such targets not only create
unnecessary hassles for officials but also for the people,“ Patel said.
Nitin Soni, a chartered accountant
and tax expert, opined that growing market of black money could be the reason
for the gap between tax collection and GDP. “Considering the growing GDP of the
country, the tax collection should also increase. But as the figure shows, the
tax collection is failing to meet the expected target. This could be because of
black money hoarding to avoid paying the tax,“ Soni said, adding, “This year we
may fall short of the direct tax target by at least Rs 40,000 crore.“
Some experts blamed the slowdown
in the recent past as the reason of concern. There may have been cases where
the total profit turnout of big corporates has decreased which led to the fall
in collection of tax. “Downturns can affect tax collection badly. So, there is
a need to look into all these matters before coming to any conclusion,“ said Soni.
However, income tax officers are
optimistic that they would still be able to meet the target as the counting
will continue for the next one week. “So far, we are around Rs 55,000 crore
short of the target but considering that highest amount of direct tax is
collected on March 31, we may just be able to meet the target,“ said a top
Income Tax officer requesting anonymity. Centre may miss direct tax target by
Rs 40,000 cr
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