The net direct tax collection of the Centre at the end of the first quarter of 2003-04 stood at just Rs 8,672 crore 0r Rs 86.72 billion (April-June 25). This is 16 per cent less than the amount collected in the same period last year.

Collections have been hit by the huge refunds, which touched Rs 12,280 crore (Rs 122.8 billion), almost double the amount (Rs 6,646 crore) in April-June 2002-03.

There has been a 31 per cent increase in refunds in 2002-03 from the position a year ago.

However, commenting on the issue, Chairman of the Central Board of Direct Taxes, P L Singh, said the department had been able to reduce the backlog on refunds to those pending post-December 2002.

Net corporate tax collections from April 1 to June 25, 2003, have touched only Rs 2,886 crore (Rs 28.86 billion), which is only 5.6 per cent of the annual target of Rs 51,499 crore (Rs 514.99 billion).

This is despite the first instalment of advance tax collections paid by corporates, wherein they have paid 15 per cent of their estimated tax dues for the year.

Net income-tax collections were slightly better at Rs 5,786 crore (Rs 57.86 billion) in the first three months of the fiscal, accounting for only 13.13 per cent of the annual target of Rs 44,070 crore (Rs 440.70 billion).

Government sources said the poor revenue collection would force the Centre to go in for additional borrowing in the short term in order to meet expenditure needs, which had touched about 25 per cent of the annual target in several major ministries under the new cash-flow management concept introduced in the Budget for 2003-04.

They added that the poor rate of revenue realisation was likely to affect the annual target of tax collections, set at Rs 95,569 crore (Rs 955.69 billion) in the Budget.