Due to the nationwide lockdown imposed to tackle the outbreak of
novel coronavirus, or COVID-19, the Centre expects to miss its gross direct tax collection budget target by around Rs 3 lakh crore in FY21.
"It's difficult to ascertain right now by exactly how much we'll fall short. It's an extraordinary year and there will be at least a shortfall of around Rs 3 lakh crore," a senior government official told Moneycontrol.
For the current fiscal, the Central Board of Direct Taxes (CBDT) has set a tax target of Rs 13.19 lakh crore.
Direct tax collections for FY20 stood at Rs 10.27 lakh crore, missing even the revised estimate of Rs 11.7 lakh crore by Rs 1.42 lakh crore. It also fell 8 percent short of the Rs 11.17 lakh crore collected during FY19.
"We expect some of the losses could be made up by increase in revenue from excise duty on fuel. By how much, we'll only know later," the official said.
Since March, the government has raised excise duty on petrol and diesel twice.
The government's borrowing target would also be revised to the extent of the tax shortfall.
"Indirect tax collection would also see a decline. Based on the total shortfall, the government will take a call on how much more market borrowing would be necessary," the official said.
The 2020-21 Budget set a total tax collection target of Rs 24.23 lakh crore for the current financial year, up 20.6 percent from Rs 20.01 lakh crore raised a year ago.
The government had announced a that gross market borrowing for FY21 would be to the tune of Rs 12 lakh crore, an increase of Rs 4.2 lakh crore due of the economic impact of the COVID-19 pandemic and a nationwide lockdown.
According to government data, the central government's gross tax collections fell 41.2 percent on year to Rs 1.26 lakh crore in April-May as the lockdown brought the economy to an almost standstill.
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