November 3, 2023
This growth significantly outpaces the budgeted 10% increase for the entire fiscal year
The growth in corporation tax and Customs collections exceeded the budgeted rates
Nearly 49% of the FY24 Budget Estimate has already been collected
Central Goods and Service Tax collections from April to September saw a year-on-year increase of 16.6%
In the first half of FY24, the gross-tax revenue (GTR), net of refunds, witnessed a substantial year-on-year growth of 16.3%, according to the Controller General of Accounts (CGA). This growth significantly outpaces the budgeted 10% increase for the entire fiscal year.
A significant increase in personal income tax collections primarily drove the surge in GTR during the first half of the fiscal year. Additionally, the growth in corporation tax and Customs collections exceeded the budgeted rates. The impact of elevated inflation was also evident in the higher collections, particularly in the case of GST and Customs revenues.
In the first half of the fiscal year, income tax collections increased by 31.1% year-on-year, reaching INR 4.52 trillion, while corporation tax collections rose by 20.2% to INR 4.51 trillion.
Experts noted that with a 27% increase in corporation tax collections in September, along with healthy advance tax inflows, nearly 49% of the FY24 Budget Estimate has already been collected.
An official from the finance ministry recently suggested that the Centre’s direct tax collections may comfortably exceed INR 19 trillion, surpassing the Budget Estimate of INR 18.23 trillion.
On the indirect tax front, buoyancy in collections is also evident. Central GST collections from April to September saw a year-on-year increase of 16.6%, reaching INR 3.98 trillion, while collections from GST compensation cess rose by 11.7% to INR 69,131 crore.
However, excise duty collections experienced a year-on-year decline of 10.8%, totalling INR 1.25 trillion. This sharp drop contrasts with the budgeted growth of 9.2% for FY24. The reduction in excise (and cess) rates on auto fuels in May 2022 is believed to be the primary reason for the decline in excise revenue.
Source: Financial Express