NEW DELHI: Rejecting arguments that fiscal deficit target of 3.2 per cent is optimistic, Economic Affairs Secretary Shaktikanta Das said it is realistic and there is all possibility that revenues will exceed the target as Budget has not taken into account the demonetisation windfall.
“Revenue if at all can exceed because people are pointing out that you have not taken into account windfall you will get from RBI because of demonetisation,” he told PTI in an interview.
Besides, he said, there would be collection taxes next fiscal from those who fail to avail Pradhan Mantri Garib Kalyan Yojana (PMGKY).
“Excess cash which has come into the banking system, Income Tax department has already analysed those data and there are large number of bank accounts where deposits made are totally disproportionate to the income of the individuals. It does not tally with their income tax returns.
“So it is far in excess of what income tax returns reflect for the previous years. So there is a strong potential in those cases to get additional revenue. In such cases, the people have an opportunity to come and declare under PMGKY,” he said.
If such individuals don’t declare, then Income Tax Department will pursue those cases next year and get the revenues, he said. “Therefore,…revenue will be better next year”.
Talking about conservative estimate for indirect taxes, Das said, a growth of only 8.8 per cent has assumed because Goods and Services Tax (GST) is being introduced.
The government intends to introduce GST, a comprehensive indirect tax reform, from July 1.
“So, therefore we want to be very careful, we didn’t want to over-project in case of indirect taxes because GST is completely new taxation system. Although the expectation is that it will be revenue neutral but keeping that in mind we have been very careful and assumed 8.8 per cent growth,” he said.
While the CGST will subsume central taxes of excise, central sales tax and service tax, IGST is to be charged on movement of goods and services from one state to another.
States will also have to pass SGST or State Goods and Service Tax. Also, a GST Compensation Act needs to be approved by Parliament to provide for compensation to states that lose revenue from implementation of GST in first five years.
While the all-powerful GST Council has already decided on a four-slab tax structure for the indirect tax regime, the levy for different goods and services will be decided by May or June.
The GST Council has fixed the four-tier structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent.