New Delhi [India], June 7 (ANI): The Central Body of Direct Taxes (CBDT) on Sunday informed that net direct tax collection for the FY 2019-20 was less than that in comparison to FY 2018-19 but highlighted that this fall in the collection of direct taxes is on "expected lines" and is "temporary" in nature due to the historic tax reforms and much higher refunds issued during the FY 2019-20.
"There are reports in a certain section of media that the growth of direct taxes collection for the FY 2019-20 has fallen drastically and buoyancy of the direct tax collection as compared to the GDP growth has reached negative. These reports do not portray the correct picture regarding the growth of direct taxes," CBDT said in a press note dated June 7.
"It is a fact that the net direct tax collection for the FY 2019-20 was less than the net direct tax collection for the FY 2018-19. But this fall in the collection of direct taxes is on expected lines and is temporary in nature due to the historic tax reforms undertaken and much higher refunds issued during the FY 2019-20," it said.
The CBDT also stated that in FY 2019-20, amount of total refunds given was Rs 1.84 lakh crore as compared to Rs 1.61 lakh crore in FY 2018-19 which is a 14 per cent increase year-on-year.
According to the release, the revenue impact of reforms including lowering of corporate tax rates and exemptions in the income tax structure have been estimated at Rs 1.45 lakh crore for Corporate Tax and at Rs 23,200 crore for the Personal Income Tax (PIT).
The CBDT said the assertion that in spite of the tax reforms, the investment has not been picking up is not correct and is without an appreciation of the reality of the business world.
"The setting up of new manufacturing facilities requires various preliminary steps like the acquisition of land, construction of factory sheds, setting up of offices and other infrastructures, etc. These activities cannot be completed in just a few months and the manufacturing plants cannot start manufacturing goods from the next day of the announcement of reforms," read the release.
"The tax reforms were announced in September 2019 and the results are expected to be visible in the next few months and in years to come. The outbreak of COVID-19, may further delay this process but the growth in production due to these tax reforms is bound to happen and cannot be stopped," it said.
It said that the Government is committed to providing a hassle-free direct tax environment with moderate tax rate and ease of compliance to the taxpayers and also to stimulate the growth by reforming the direct taxes system. (ANI)