Direct and indirect tax collections are expected to exceed budget estimates in the current year, Revenue Secretary Tarun Bajaj has said. Significantly, he is hopeful that customs duty collection will exceed budget estimates while those from central excise duty will be close to budget estimates.
The government has set a target of ₹14.40 lakh crore from direct taxes and ₹13.30 lakh crore from indirect taxes.
“We will not only achieve those targets; we will exceed those targets by a good margin. Our direct taxes should be up by between 25 and 30 per cent over FY22. On the indirect tax front, we gave relief on customs duty and excise duty. Despite that we expect customs duty collection will exceed budget estimates by a good margin,” Bajaj told businessline in an interview.
Latest data shows direct tax collections up to November 10 were at ₹10.54 lakh crore, which is 30.69 per cent higher than the gross collections for the corresponding period last year. Among indirect taxes, GST collections have been over ₹1.40 lakh crore in each of the first seven months of the current fiscal year. So far, 67 per cent of the budget estimates for GST at the Centre have already been achieved in the first seven months.
However, collections for customs duty and central excise duty have been slightly lower. Data from CGA shows customs duty collection in the first six months of the current fiscal was at ₹86,267 crore, which is around 6.9 per cent less than ₹92,653 crore. For central excise duty, collections dropped to around ₹1.40 lakh crore from over ₹1.71 lakh crore, showing a decline of over 18 per cent. Collections declined mainly on account of the duty cut.
However, Bajaj feels these will not impact the entire tax collection. “Overall, taxes should be good, and the buoyancy that has been seen on direct taxes and on GST is very healthy, which is a good sign. We hope the collection of customs and excise duty will be close to the budget estimates. We expect the revenue will again shoulder the fiscal burden of the government of India,” he said.
Talking about issues on the finalisation of the GST mechanism for online gaming, casinos, and horse racing, Bajaj indicated that in case there are no categorical recommendations from GoM on this, then the role of the GST Council will become much more important.
“I am not sure when it will be taken. It will depend on whether GoMs submit their recommendations, the kind of recommendations they give and whether these can be included in the agenda. But if not in the next meeting of the Council, then maybe in the one after that. We will also have to confront the situation of no consensus in the GoM. So far, various GoMs have given a categorical view on any aspect. In case it does not happen, the Council will decide.”