In the current fiscal, service tax revenues are projected to surge 17 per cent to Rs 68,000 crore — and the performance in the first four months indicates that collections are growing at about half the projected pace.

“I fail to understand why the growth in service tax should be so small. It is an acknowledged fact that the services sector in the country is growing substantially. I would like those of you concerned with the service tax collection to ponder over this, and find ways and means to increase the collections,” Mukherjee said at a meeting here today with the chief commissioners and commissioners of income tax, customs and central excise.

The finance minister was satisfied with the pace of direct tax collections that had grown 15.75 per cent as of July 31 but was concerned that collections from Mumbai — the highest contributor to the exchequer — was “below the national average”.

“The achievement of direct tax collection largely depends upon the collection from Mumbai. Therefore, revenue collection should be monitored effectively and special efforts should be made to achieve not only the budgeted target but also to exceed it,” Mukherjee told the authorities.

The finance minister said though there had been an increase in advance tax collections in Mumbai in this fiscal of 22 per cent, tax deducted at source had declined almost 2 per cent.

“The trend in TDS collection, which is a major source of revenue to the government exchequer, should be analysed to ensure that taxes due from TDS are collected,” he added.

Mukherjee was also concerned about the collection of arrears.

He said in the Mumbai zone, over Rs 3,000 crore was locked up in central excise arrears and Rs 1,740 crore in customs duty arrears.