The government is likely to end FY 2005-06 with a direct tax shortfall of Rs 3,500- Rs 4,000 crore (Rs 35-40 billion) against a revised target of Rs 1,69,812 crore. This is mainly on account of lower corporate tax collections.

Finance Minister P Chidambaram has asked the Central Board of Direct Taxes to analyse reasons for this.

Indirect tax mop-up, however, is expected to marginally exceed the revised target of Rs 1,12,000 crore (Rs 1120 billion) on account of higher Customs and service tax collections.

According to flash data up to March 31 available with the finance ministry, corporate tax collections are around Rs 97,561 crore (Rs 975.61 billion) against a revised Budget estimate of Rs 1,03,573 crore (Rs 1035.73 billion).

Officials said one reason for this could be higher investments by corporates. Poor performance of banking and insurance sector along with oil and telecom companies has also hit corporate tax collections, they add.

Officials say the corporate tax mop-up is expected to touch Rs 1,00,000 crore (Rs 1000 billion) once final figures are compiled.

Income tax collections inclusive of the fringe benefit tax, securities transaction tax and the banking cash transaction tax have touched Rs 62,500 crore (Rs 625 billion) compared with the revised estimate of Rs 66,239 crore (Rs 662.39 billion).

"The income tax collections are expected to touch the revised estimate since many tax challans submitted in the hinterland take some days to register in the system. The strike by the State bank of India [Get Quote] employees has also impacted the collections," an official said.

The performance on the indirect tax front is better with Customs collections at Rs 64,879 crore (Rs 648.79 billion) being marginally higher than the revised estimate of Rs 64,215 crore (Rs 642.15 billion). Excise collections are Rs 1,11,789 crore (Rs 117.89 billion) compared with the revised estimate of Rs 1,12,000 crore (Rs 1120 billion).

Service tax collections are Rs 21,209 crore (Rs 212.09 billion) and are expected to touch Rs 23,500 crore (Rs 235 billion) once final figures are compiled Officials said the excise collections were expected to reach close to the revised estimate.

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