This revenues forgone, but not forgotten

CHENNAI: The Budget document for 2012-2013 has made it official. For the seventh consecutive year now, the Central Government, has seen an increase in revenue foregone under four major tax heads. The figure has touched Rs 5,29,432 crore for the just concluded fiscal.The total revenue foregone for the government is ascertained by calculating the effect of “tax incentives” or “tax subsidies” that are given to a gamut of players in the economy, including individual tax payers and corporates.This includes the revenue forgone through concessions provided for excise and customs duties as well.A persual of the “Statement of revenue forgone,” which is part of the budget document presented to Parliament, reveals that total estimated write-offs by the Central government under the heads Personal Income Tax, Corporate Income Tax, Excise Duty and Customs Duty, for the year 2011-2012, has gone up by an estimated Rs 69,727 crore compared to 2010-2011, from Rs 4,59,705 crore to Rs 5,29,432 crore.If the deductions for personal income tax, which includes tax concessions given to individual tax payers, is taken away from the total figure, write-offs under the three heads of Corporate Income Tax, Excise Duty and Customs Duty, which largely benefits big institutions, stood at an estimated Rs 4,87,112 crore. To put it into perspective, this is about Rs 3,11,112 crore higher than the estimated foregone in the 2G spectrum scam.However, in a sort of reversal of trend, the amount under the corporate income tax head in the document has decreased for the first time in six years, thanks to the phasing out of certain incentives.But this reversal in corporate tax revenue foregone was more than compensated by the revenue forgone under the customs duty head, which has increased by a whopping 20 per cent and stood at estimated Rs 2, 23,653 crore in 2011-2012 compared to Rs 1,72,740 crore in the previous fiscal. The chunk of this concession was given to precious stones and jewellery, which stood at an estimated Rs 57,063 crore followed by mineral fuels and oil.