Budget Interest Payments on Refunds: PAC
Over 10,000Cr Spent Annually On Interest Due To Delayed Payouts
The Union finance ministry pays more than Rs 10,000 crore every year as interest on delayed IT refunds.In the five years till 2010-11,it had paid over Rs 37,000 crore as interest,and without the approval of Parliament or any budgetary provision. The Parliaments Public Accounts Committee (PAC) the watchdog that reviews all expenditure made by the government out of the Consolidated Fund has now finalized a report on this issue asking the government to take Parliaments prior approval for making any expenditure of this kind.The payment of interest on refunds of excess tax lies with the Consolidated Fund of India,and is payable only after having been authorized by Parliament. Sources said the PAC has called the expenditure illegal,saying the government cannot make such huge payments unless it is provided in the Budget and Parliament's approval is taken for it.The PAC report is likely to be tabled in the Budget session. This is only going to make the job of revenue department officials difficult as even during the current fiscal,the I-T department has only been clearing refunds below Rs 5 lakh.Refunds of bigger amounts have been delayed to show the net tax mop up positive. The PAC recommendations have been made over a report of the Comptroller and Auditor General (CAG) on the Union Accounts for 2010-11 tabled in Parliament last year.The CAG report had said that CBDT violated provisions of Article 114(3) of the Constitution which stipulates that no money shall be withdrawn from the Consolidated Fund except under appropriation made by law. The excess expenditure,as pointed out by the auditor,works out to over 2.3 times of the total expenditure budget of CBDT (Rs 4,522 crore) for 2010-11,and the trend was similar in past financial years as well.Sources said by not making a budgetary provision for interest payments,the government has been trying to avoid a debate in Parliament over such a huge expenditure. The revenue department sources said the average growth of 8% in gross direct tax collection in the current fiscal may result in the shortfall in Budget target exceeding Rs 30,000 crore.An average growth of 15% was required to meet budget estimates of Rs 5.70 lakh crore for 2012-13.The situation is all that rosy on the indirect tax front either.Against an average growth of 27% required to meet the budget estimate of Rs 5.07 lakh crore,the indirect taxes collections have grown at an average of 15% so far.The shortfall estimated could exceed Rs 45,000 crore,say sources.
Times of India, New Delhi, 08-01-2012