Sluggish industrial performance in the first few months of the current fiscal has had little impact so far on direct tax collection withcorporate tax rising 30% during April-July 2011. The total corporate tax collection in the first four months was estimated at Rs 85,222 crore, contributing majorly to the overall tax collection which stood at Rs 1.33 lakh crore, showing an increase of 27%. 

The growth is even better than what was seen in the April-June period. The gross direct tax collection during the April-June 2011 quarter had increased by 24%. The gross direct tax collections last year April-July period was Rs 1.05 crore and the share of corporate taxes in that was Rs 85,222 crore. 

Net tax collections, however, decreased 8.13% to Rs 78,679 crore during the first four months of the fiscal on account of an increase of 183% in refunds, according to the Central Board of Direct Taxes. Refunds stood at Rs 53,863 crore as against Rs 19,021 crore in the same period last fiscal. 

The growth in wealth tax has been 39% while securities transaction tax has shown a decline with collection going down by 6% at Rs 1,555 crore as against Rs 1,652 crore. 

Meeting tax collections is critical for the government to meet its expenditure as the finance ministry is under severe pressure to rein in its spending given that it had budgeted for few shocks and gave itself little headroom to adjust to the situation. The increase in crude oil prices since February, when the budget was presented, has already resulted in a projected under-recovery of Rs 1 lakh crore for oil marketing companies, which will have to be borne by the government. But at the moment this subsidy bill is unfunded. 

Already, revenue department officials have issued a warning note saying the targets may be missed due to slowdown affecting corporate bottom lines. 

Even finance minister Pranab Mukherjee on Thursday warned of missing the fiscal deficit target of 4.6% of gross domestic product. But in the past he has said that, like last year's Rs 1 lakh crore 3G spectrum bonanza, he is hoping that Goddess Luck would smile on him again this year. (Times of India)