Revenue generated for the government sees a spike in the ongoing financial year
Both, the emergence of digitsation post the hugely debated demonetisation and the oncoming of a uniform tax system in the form of goods and services tax (GST) ideated a single concept of expanding the tax net in the country. Finance Minister Arun Jaitley along with Prime Minister Narendra Modi have been harping on the need to increase tax collections by reducing defaulters. The newly introduced methods seem to be working in the intended direction.
The provisional figures of Direct Tax collections up to September, 2017 issued by the government on 11 October show that net collections are at Rs 3.86 lakh crore, which is 15.8% higher than the net collections for the corresponding period of the last financial year. Gross collections (before adjusting for refunds) have increased by 10.3% to Rs 4.66 lakh crore during April to September, 2017. Refunds amounting to Rs 79,660 crore have been issued during April to September, 2017.
Net Direct Tax collections represent 39.4% of the total Budget Estimates of Direct Taxes for F.Y. 2017-18 (Rs 9.8 lakh crore). An amount of Rs 1.77 lakh crore has been received as Advance Tax up to 30th September, 2017 reflecting a growth of 11.5% over the Advance Tax payments of the corresponding period of last year. The growth in Corporate Income Tax (CIT) Advance Tax is 8.1% and that in Personal Income Tax (PIT) Advance Tax is 30.1%.
"It is relatively difficult to evade the tax system with GST being introduced. Both, retailers and wholesalers are now having to record and file their accounts. However, the increase in tax collections need more time to be evaluated in detail," said D.K. Shrivastav, chief policy advisor, EY, a consultancy.
The Finance ministry’s release last month for the April-August period had stated that the net corporate income tax collections grew 18.1% from the same period last year and gross collections grew 5% year-on-year.
Personal Income tax rose 16% during April-August and after adjusting for refunds, the net growth in personal income tax collections had been 16.5%.
Refunds amounting to Rs 74,089 crore were issued during April-August, 7.2% lower than the corresponding period last financial year.
With the current state of the economy being brought under the scanner, these numbers are sure to bring some respite.