Revenue estimates are sometimes at the mercy of the administrative process. Supp
ID: 2369586 • Letter: R
Question
Revenue estimates are sometimes at the mercy of the administrative process. Suppose you are developing estimates of corporate income tax collections for a state. In your review of historical data, you find that a large but quantitatively imprecise amount of collections were moved from one fiscal year to another because overlapping vacation schedules caused the collection' mailroom to shut down in the last two weeks of the fiscal year. How might you handle this problem in preparing your esitmate, both in perfecting the historical data and in delivering your estimate?
Explanation / Answer
Receipt Budget, 2011-2012
Tax Revenue
collected by the Government of India and shall be distributed between the Union and the States in such manner as may be
prescribed by the President on the recommendations of the Finance Commission. For the period 2010-2015, the manner of
distribution between the Centre and the States has been adopted after considering the recommendations of the Thirteenth Finance
Commission.
1. Corporation Tax:.This is a tax levied on the income of Companies under the Income Tax Act, 1961. Revised Estimate of
Corporation Tax for 2010-2011 is..`.296377 crore as against Budget Estimate of..`.301331 crore. Budget Estimate for 2011-2012
is..`359990 crore...
2. Taxes on Income:.This is a tax on the income of individuals, firms etc. other than Companies, under the Income Tax Act,
1961. This head also includes other Taxes, mainly the Securities Transaction Tax, which is levied on transaction in listed securities
undertaken on stock exchanges and in units of mutual funds. Revised Estimate of Taxes on Income for 2010-2011 is..`.149066 crore
as aginast the Budget Estimate of..`.128066 crore. Budget Estimate for 2011-12 is..`.172026 crore...
3. Wealth Tax:.This is a tax levied on the specified assets of certain persons including individuals and companies, under the
Wealth Tax Act, 1957. Revised Estimate of Wealth Tax for 2010-2011 is..`.557 crore as against Budget Estimate of..`.603 crore.
Budget Estimate for 2011-2012 is..`.635 crore...
4. Customs:.Revised Estimate of Customs Duties for 2010-2011 is..`131800 crore as aginst the Budget Estimates
of..`115000 crore. Budget Estimate for 2011-2012 is..`151700 crore...
4.01.01. Basic Duty:.Basic Duty of Customs is leviable on imported goods under the Customs Act., 1962.
4.01.02. Additional Duty of Customs (CVD):.Additional Duty of Customs is leviable under Section 3 of the Customs Tariff Act,
1975 equivalent to duty of Excise leviable on such domestically manufactured goods. Mean CENVAT rate of Central Excise duty was
increased from 8% to 10% w.e.f. 27.02.2010.
4.01.03. Special CV Duty:.Special CV Duty is leviable @ 4% on all imported goods, with few exceptions, to partially compensate the
domestic levies such as State VAT, Central Sales Tax etc.
4.01.04. Additional Duty of Customs on Motor Spirit:.Additional Duty of Customs on Motor Spirit is leviable by the Finance Act
(No.2), 1998. This is commonly known as road cess.
4.01.05. Additional Duty of Customs on High Speed Diesel Oil:.Additional Duty of Customs on High Speed Diesel Oil is leviable
by the Finance Act, 1999. This is commonly know as road cess.
4.01.06. Special Additional Duty of Customs on Motor Spirit:.Special Additional Duty of Customs on Motor Spirit is leviable by
the Finance Act, 2002. This is commonly known as surcharge.
4.01.07. National Calamity Contingent Duty:.National Calamity Contingent Duty was imposed under Section 134 of the Finance
Act, 2003 on imported petroleum crude oil. This tax was also leviable on motor cars, imported multi-utility vehicles, polyester filament
yarn and two wheelers. National Calamity Contingent Duty has been removed from Polyester Filament Yarn and imposed on Mobile
Phones @ 1% from Budget 2008-09.
4.01.08. Education Cess:.Education Cess is leviable @ 2% on the aggregate of duties of Customs (except safeguard duty under
Section 8B and 8C, CVD under Section 9 and anti-dumping duty under Section 9A of the Customs Tariff Act, 1985). Items attracting
Customs Duty at bound rates under international commitments are exempted from this Cess.
4.01.09. Secondary and Higher Education Cess:.Secondary and Higher Education Cess is leviable @ 1% on the aggregate of
duties of Customs.
4.02. Export Duty:.Export Duty is leviable on ores and concentrates of Iron and Chromium.
Arrear Collection:.RE 2010-11 and BE 2011-12 include collection of arrears of Customs Duties of..`.1164 crore and..`1000 crore
respectively...
5. Union Excise Duty:.Revised Estimate of Union Excise Duties for 2010-2011 is..`137777.52 crore as against the Budget
Estimate of..`132000 crore. Budget Estimate for 2011-2012 is..`164115.66 crore...
5.01. Basic and Special Excise Duty:.Basic Excise Duty and Special Excise Duty are leviable under the Central Excise Act at
the rates specified in the Central Excise Tariff Act, 1985. The mean CENVAT rate was increased from 8% to 10% w.e.f. 27.02.2010.
Excise duty on Motor Spirit (MS) and High Speed Diesel (HSD) was increased by Re.1 per litre.
5.02. Additional Duty of Excise on Motor Spirit:.Additional Duty of Excise on Motor Spirit is leviable by the Finance Act (No.2),
1998. This is commonly known as road cess.Receipt Budget, 2011-2012 5
Tax Revenue
5.03. Additional Duty of Excise on High Speed Diesel Oil:.Additional Duty of Excise on High Speed Diesel Oil is leviable by
the Finance Act, 1999. This is commonly known as road cess.
5.04. National Calamity Contingent Duty (NCCD):.National Calamity Contingent Duty was levied on pan masala and certain
specified tobacco products vide the Finance Act, 2001. The Finance Act, 2003 extended this levy to: (a) polyester filament yarn,
motor car, two wheeler and multi-utility vehicle @ 1% and (b) crude petroleum oil @..`50 per metric tonne...
5.05. Special Additional Duty of Excise on Motor Spirit:.Special Additional Duty of Excise on Motor Spirit is leviable by the
Finance Act, 2002. This is commonly known as surcharge.
5.06. Surcharge on Pan Masala and Tobacco Products:.An Additional Duty of Excise has been imposed on cigarettes, pan
masala and certain specified tobacco products, at specified rates in the Budget 2005-06. Biris are not subjected to this levy.
5.07.01. Education Cess:.Education Cess is leviable @ 2% on the aggregate of duties of Excise.
5.07.02. Secondary and Higher Education Cess:.Secondary and Higher Education Cess is leviable @ 1% on the aggregate of
duties of Excise.
Arrear Collection: RE 2010-11 and BE 2011-12 include collection of arrears of Central Excise Duties amounting
to..`1323 crore and..`1100 crore respectively...
5.08.12. Clean Energy Cess:.Clean Energy Cess was imposed under section 83 of Finance Act 2010 on coal, lignite and peat
produced in India @..`50 per tonne. The cess has come into force w.e.f. 01.07.2010 and is to be collected as duty of excise...
6. Service Tax:.Revised Estimates of Service Tax for 2010-11 is..`69400 crore as against the Budget Estimate of..`68000
crore. Budget Estimate for 2011-2012 is..`.82000 crore. Education Cess and Higher Education Cess are leviable @ 2% and 1%
respectively on the total Service Tax. RE 2010-11 and BE 2011-12 include collection of arrears of Service Tax amounting to..`2013
crore and..`1500 crore respectively...
8. Taxes of Union Territories:.Revised Estimates of taxes of Union Territories for 2010-11 is..`1910.39 crore as against the
Budget Estimate of..`1651 crore. Budget Estimate for 2011-2012 is..`.1973.22 crore...
9. NCCD transferred to the NCCF:.Revised Estimates of National Calamity Contingency Duty transferred to the National
Calamity Contingency Fund for 2010-11 is..`3900 crore as against the Budget Estimate of..`3560 crore. Budget Estimate for 2011-
2012 is..`.4525 crore...
10. States' share:.Revised Estimates of States' share in Central Taxes and Duties for 2010-11 is..`219302.81 crore as against
the Budget Estimate of..`208996.88 crore. Budget Estimate for 2011-2012 is..`.263457.74 crore...
Arrears of Tax Revenue:.In compliance of Rule 6 of the Fiscal Responsibility & Budget Management Rules, 2004 (FRBM Rules), a
disclosure Statement on Tax Revenues raised but not realized in respect of the principal taxes is at Annex 11.
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