IT department failed to bring 4.2 lakh companies for assessment: CAG.

Direct taxes collections increased from Rs. 2,30,181 crore in 2006-07 to Rs. 3,33,818 crore in 2008-09 at an average annual rate of growth of 27.3 per cent.  Global recession and economic slowdown in 2008-09 had an impact on actual collections which were lower by 8.5 per cent than the budget estimates. These are the findings of the Comptroller & Auditor General's report on direct taxes of the Union Government for the year ended March 2009.

Tax-Gross Domestic Product (GDP) ratio in 2008-09 also reduced from 6.6 per cent in 2007-08 to 6.3 per cent in 2008-09.  For every unit growth in GDP, direct taxes grew by 0.6 per cent only in 2008-09 reversing the trend of buoyancy in excess of one in earlier years.  The deceleration in tax collection was thus sharper than that of GDP. The total number of direct tax assessees declined by 3.0 per cent in 2008-09, as compared to an increase by 7.6 per cent in 2007-08.  The decline was sharper among corporate assessees.

The I T Department failed to bring 4.2 lakh companies for assessment despite these being registered with Registrar of Companies (ROC) as on 31 March 2009. Department's failure in correlating details with the records of other tax authorities is being exploited by the assessees to evade taxes.

According to the report on Central Excise, the total receipts of excise duty reduced from Rs 1,23,611 crore in 2007-08 to Rs 1,08,613 crore during 2008-09. While the variation between the actual collections and budget estimates was within 10 per cent during 2004-05 to 2007-08, this was significantly higher at 21.2 per cent during 2008-09. There were instances of undervaluation due to incorrect determination of cost of excisable goods, incorrect exclusion of the retained amount of sales tax from the assessable value of excisable goods, non-inclusion of additional consideration in the assessable value, adoption of lower assessable value etc.

The Report of the Comptroller and Auditor General of India on Customs Receipts contains observations with revenue implication of Rs. 54.09 crore. The total recovery effected at the instance of audit up to January 2010, is Rs. 16.54 crore. The actual customs receipts for the year 2008-09 was Rs. 99,879 crores, a reduction from Rs 1, 04,119 crores during the year 2007-08.  The collection fell short of both the budget and revised estimates, primarily due to the reductions in the duty rates for major items such as crude oil and vegetables oils. The duty foregone of Rs. 61,174 crore under various export promotion schemes was 61 per cent of the total customs receipts. Outstanding Customs revenue of Rs. 5,136.29 crore up to March 2009 was not realised by the department by the end of the financial year 2008-09.
    
Source : indiatoday.intoday.in