Indirect tax take rises 27% on excise
The Centre’s indirect tax collections increased more than 27 per cent in the April-August 2016 period, helped by a 49 per cent jump in excise receipts, according to data released by the Ministry of Finance on Monday. The government also reported a 15 per cent increase in direct tax collections.
“The figures for direct tax collections up to August 2016 show that net revenue collections are at Rs.1.89 lakh crore which is 15.03 per cent more than the net collections for the corresponding period last year,” the official statement said.
“Till August 2016, 22.3 per cent of the Budget Estimates of direct taxes for financial year 2016-17 has been achieved.”
The increase in tax collection, however, may not be enough to help the government meet its fiscal deficit target since the target this year is even stricter than that of last fiscal, and the government is likely to increase its capital spending following the monsoon, according to experts. A separate government statement said indirect tax collections up to August stood at Rs.3.36 lakh crore, 27.5 per cent higher than the amount collected during the year-earlier period.
“Till August 2016, 43.2 per cent of the Budget Estimates of indirect taxes for financial year 2016-17 has been achieved,” the statement said.
Tax refunds
Within direct tax, the government said that corporate tax refunds during April –August — amounting to Rs.77,080 crore, up 22.2 per cent from the same period last year — led to net corporate tax collections actually contracting during the period.
“However, after adjusting for refunds, the net growth in CIT collections is (-)1.89 per cent while that in PIT collections is 31.76 per cent.”
‘Ambitious targets’
“Right now we have data for only 4-5 months into the year and from this data, it appears we might still miss the annually budgeted target because those targets were very ambitious and the fiscal deficit target plans for a further reduction compared to last year,” D.K. Srivastava, Chief Policy Advisor EY India, told The Hindu.
The Centre will likely increase capital expenditure after the monsoon, and the 7th Pay Commission impact would also begin to kick in, leading to a challenging fiscal deficit situation, Mr. Srivastava said.
In indirect tax, central excise collections stood at Rs.1.53 lakh crore during April-August, up 49 per cent from the year earlier period. Service tax collections were Rs.92,696 crore, witnessing an annual increase of 23.2 per cent. Customs duty collections were up 5.7 per cent at Rs.90,448 crore.
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