Budget 2012: Tax write-offs in plenty, but for the bigger, they’re better

For all the talk of phasing out exemptions and concessions from the finance ministry, there is little to show by way of achievement. In fact, latest data in the budget estimates that the government will dole out concessions worth Rs 5.3 lakh crore this fiscal compared to Rs 3.7 lakh crore in 2011-12, an increase of about 43%.
Barring a small decline of Rs 1,100 crore in direct taxes, it’s a story of another missed opportunity as FM Pranab Mukherjee went about handing out sops for almost everything — from export promotion to fueling diesel vehicle sales.
Indirect taxes lost by way of concessions are 1.45 times the duty collected, which is estimated at Rs 3 lakh crore during the current fiscal. Last year the sops were 1.3 times the mop up from excise and customs duty, indicating that the government has been more liberal.
The biggest loss came from customs duty where the government lost Rs 2.24 lakh crore, thanks to various sops. Within this, crude oil (Rs 58,000 crore) and gold and diamond (Rs 57,000 crore) accounted for nearly half the revenue foregone, with machinery and food products making up another quarter.
In case of excise too, oil was the big contributor, especially after the government slashed import duty to limit the price hike on diesel last summer. Overall, excise duty concessions cost the exchequer Rs 2.12 lakh crore, which is an increase of a tad over 10%.
For customs, the rise in the value of concessions was estimated at 29%.
Budget 2012
Budget News 2012