Mumbai, October 7, 2017
MoS finance will visit Mumbai on Monday to discuss how to take stock of unaccounted bank deposits
Determined to show the material impact of demonetisation, the Centre is nudging the income tax (I-T) department to achieve the target of establishing Rs 3 lakh crore, claimed to be unaccounted cash deposits with banks made during the demo drive.
To ensure that the target is met, Minister of State for Finance Shiv Pratap Shukla is visiting Mumbai on Monday to meet I-T officials. Sources in the know said the minister would take stock of tax collections and implementation of action plan drawn out for FY18. The minister would also discuss the causes which could be stopping department to nab tax evaders.
This comes as a double whammy to the tax department which is already reeling under pressure fearing shortfall in the direct tax collection target for FY18.
“It is quite challenging to identify, establish and tax the unaccounted cash deposits. First, there is no certainty of the quantum itself. Second, to identify such trails, the department needs to have designated officer who would only focus on demonetisation cases,” said a senior tax official.
Such an approach on the demonetisation cases may irk the government which is believed to be not satisfied with the efforts taxmen are putting to accomplish the goal. In addition, routine search and seizures are not giving the desired results.
As per the official data, Mumbai, which contributes a significant portion of the total direct tax collection has so far seized assets worth Rs 10.92 crore. The total disclosure made during searches was Rs 36 crore till September. Mumbai I-T had so far conducted only 15 searches.
This is after the tax department tweaking its strategy and action plan for FY18 from just raising tax demand to going the extra mile to take tax evaders to book. The Central Board of Direct Taxes (CBDT) in its central action plan had said tax officials could launch prosecution against evaders soon after the search was conducted.
Further, the apex tax body said that officials at the level of additional directorate would need to conduct at least two searches and seizures every week. Taxmen were also asked to take prompt action against violators if they found sufficient evidence during searches itself. Data indicate tax officials are falling short of expectations.
The government estimates to collect Rs 9.8 lakh crore from direct taxes in the current fiscal. The direct tax collection in the first five months of the current fiscal grew 17.5 per cent to Rs 2.24 lakh crore. But this was mainly on account of individuals and holding back big refunds.
Advance tax collections from the corporate sector as well as tax deducted at source for the September quarter had showed a tepid response. To improve the situation amid goods and services tax (GST) issues, tax department initiated pre-emptive measures to ensure that tax collections target are back on track. The CBDT is said to have set a deadline of October end to improve the overall growth rate of tax collection as it fears that collections this quarter could also be lukewarm.
[The Business Standard]