Negative List to Result in Negative Revenue? A Joke in Budget Making?
AS per the RECEIPTS shown in the 2012 Budget, the Service Tax revenue for 2011-12 is Rs 95,000 crores. The tax rate has been increased to 12%. Ignoring any other change, the estimated revenue will be a function of growth in economy and the inflation. Assuming both to be 6% (Underestimated), the revenue for 2012-13 should be 95000*1.06*1.06=1,06,742 crores. To this, now add the 20% increase in tax rate. The amount comes to 106742*1.2=1,28,090 crores. But the estimate for 2012-13 is only Rs 1,24,000 crores.
Does this mean the Government expects a revenue loss from expansion of services through the negative list?
In fact, they would get much more than the highly understated tax revenue, which will be, trumpeted as great administrative efficiency!!