Direct tax mop-up tops pre-Covid levels by 18%

Our Bureau | | Updated on: Nov 29, 2021
image caption

But ₹52,000-cr GST compensation pending to States till September

Direct tax collection in the current fiscal year has exceeded pre-Covid numbers by over 18 per cent, the Lok Sabha was informed on Monday. But over ₹51,000 crore of GST (Goods & Services Tax) compensation is still pending.

Steep rise

Higher direct tax collection reflects recovery picking up but the compensation due means that the GST collection in some States and Union Territories is less than expected.

In a written reply, Minister of State for Finance Pankaj Chaudhary said, “The gross direct tax collection figures for FY22 as on November 23 are at ₹8,15,262.7 crore showing a growth of 48.11 per cent and 18.15 per cent over the gross collection figures for the corresponding period in FY21 and FY20 respectively.”

Also seeL 12 MoUs to attract investments worth ₹14,000 crore ahead of Vibrant Gujarat summit

After subtracting the refund from gross, net collection as on November 23 jumped over 68 per cent to reach ₹6.93-lakh crore. This number is over 27 per cent higher than the corresponding period of FY20.

Barring June, GST collection has been over ₹1-lakh crore so far this fiscal year, hitting an all-time high in April. Yet, there was a revenue shortfall for States which necessitated payment of compensation.

For the current fiscal, the Centre borrowed ₹1.59-lakh crore and passed it on to the States/UTs as back-to-back loan. This is over and above the amount payable through compensation cess collection. Still, over ₹51,000 crore is pending till September, Chaudhry said.

This includes ₹13,153 crore pending to Maharashtra, ₹5,441 crore to Uttar Pradesh, ₹4,943 crore to Tamil Nadu, ₹4,647 crore to Delhi and ₹3,528 crore to Karnataka. Arunachal Pradesh, Manipur, Mizoram and Nagaland do not have any GST compensation pending from the Centre.

Also see: Indian economy recovering quickly as pandemic ebbs: Report

In reply to another question, Chaudhary said the Centre had released ₹17,000 crore on November 3 from the GST compensation fund. The compensation amount is to be paid from the compensation fund which is arrived at by levying the cess on top of the highest tax slab on luxury, demerit and sin goods. The GST compensation for FY18, FY19 and FY20 has already been paid to the States.

Funds borrowed

Chaudhary said the economic impact of the Covid pandemic has meant higher compensation due to lower collection of the GST and the compensation cess. Since collections in the compensation fund are falling short, for FY21 and FY22, the Centre borrowed ₹1.10-lakh crore and ₹1.59-lakh crore, respectively, and passed them on to the States.

Published on November 29, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you