For the first time in five years, the Indian government is likely to meet Rs 14.49-lakh crore budgetary tax collection target for 2015-16 with robust indirect tax mop up making up for the shortfall in direct levies.
“We are likely to exceed the collection in indirect tax by about Rs 40,000 crore in the current year. On the whole, we are very optimistic about achieving annual tax revenue target for the year,” Revenue Secretary Hasmukh Adhia said on Wednesday.
The government invariably falls short of tax collection target and had last time exceeded the budgeted target in 2011 fiscal.
Of the Rs 14.49 lakh crore tax revenue target set for 2015-16, Rs 7.97 lakh crore was estimated to come from direct taxes (corporate and income tax) and another Rs 6.47 lakh crore from indirect taxes (customs, excise and service tax).
In the 10 months of the current fiscal, indirect tax mop up of Rs 5.44 lakh crore was 88 per cent of the full year target. Besides, direct tax collection of Rs 5.22 lakh crore was 65 per cent of target for 2015-16.
“Looking at the trend, it appears that as far as indirect tax collections are concerned, the government may get more than Rs 40,000 crore over and above the BE (budget estimate) target for indirect taxes for 2015-16 while there might be an equal amount of shortfall in direct tax collections.
“However, both direct and indirect tax collections put together, we expect to meet the annual BE target of Revenue collections for the current year without any shortfall,” Adhia said in a statement.
The April-January tax collection data shows an increase of 33 per cent in indirect tax and 10.9 per cent jump in direct tax collection, Adhia said.
“The tax revenue trends actually supports the latest figures of GDP growth rate,” he said.
The CSO has projected Indian economy to grow by 7.6 per cent in current fiscal, the fastest pace in five years.
In 2014-15, the government had targeted Rs 13.64 lakh crore in tax revenue but at the end of the year it was revised downwards to Rs 12.51 lakh crore. In 2013-14, tax collection targets were revised downwards to Rs 11.58 lakh crore from budgeted over Rs 12.35 lakh crore.
In 2012-13, budget estimates for tax revenue was over Rs 10.77 lakh crore, but it was scaled down to Rs 10.38 lakh crore in revised estimates. While in 2011-12 fiscal, gross tax revenues were budgeted at 9.32 lakh crore, but in revised estimates it came in as Rs 9.01 lakh crore.
In 2010-11, budgeted gross tax revenue of over Rs 7.46 lakh crore was exceeded in revised estimates which came in at Rs 7.86 lakh crore.
In April-January of current fiscal, the growth in customs duty revenue on electrical machinery was 34.4 per cent and in other machinery it was 27.8 per cent.
“These are indicators of new investment taking place in private sector. New investments are taking place in the country for which these machineries are imported,” Adhia said.
In the services sector, as against 27.2 per cent average growth rate, the growth rate in banking and financial services was 44.6 per cent.
In work contract services it is 39.9 per cent and in goods transportation services growth rate is 41 per cent.
“These are also indications of high level of economic activities taking place in the country,” Adhia said.