Government Exceeds Tax Target With Strong Direct Tax, GST

In a positive turn of events for the Indian economy, the Indian government is poised to exceed its gross tax collection target for the current financial year, with figures from direct tax and GST collections pointing towards a potential surplus. 

The latest trends suggest that the government could comfortably surpass the targeted Rs 33 lakh crore, reaching upwards of Rs 34.5 lakh crore in gross taxes for the fiscal year.

According to reports, the driving force behind this fiscal success has been the remarkable performance in both direct taxes and goods and services tax (GST) collections. As per the provisional data, net direct tax collections have witnessed a substantial year-on-year surge of 20.66 per cent, marking an impressive achievement till 17 December 2023, in the ongoing financial year.

Net collections, accounting for refunds, stood at Rs 13.7 lakh crore in FY24, showcasing a considerable increase from the Rs 11.35 lakh crore recorded during the same period in the previous fiscal year. 

Breaking down the direct tax collections, corporation taxes contributed Rs 6,94,798 crore (net of refund), while personal income tax, including securities transaction tax (STT), amounted to Rs 6,72,962 crore (net of refund).

For the financial year 2023-24 (FY24), the government had budgeted Rs 18.22 lakh crore from direct taxes. In a statement released on Monday, the Central Board of Direct Taxes (CBDT) disclosed that refunds totaling Rs 225,251 crore had been issued in FY24 until 17 December 2023.

Simultaneously, Central GST collections until November 2023 reached approximately Rs 5.4 lakh crore, indicating a 14 per cent growth compared to the same period in the previous financial year. 

The government had set a target of Rs 9.56 lakh crore from Central GST. Notably, the monthly GST collection in November surpassed the Rs 1.60 lakh crore mark for the sixth time in FY24, reaching Rs 1.68 lakh crore.

Finance Minister Nirmala Sitharaman expressed satisfaction with the performance, stating that the average gross monthly collection in the current financial year has been Rs 1.66 lakh crore, a notable increase from Rs 1.5 lakh crore in FY23.

However, the same level of buoyancy has not been observed in customs and excise duty collections. Customs duty collections remained largely stagnant, totaling Rs 1.24 lakh crore until October 2023, compared to Rs 1.23 lakh crore in the corresponding period last year.

Excise duty collections by the central government experienced a year-on-year decline, with Rs 1.5 lakh crore collected in the first seven months of FY24, in contrast to Rs 1.65 lakh crore during the same period in the previous year. Despite this, the robust performance in direct taxes and GST is expected to compensate for the moderate collections in customs and excise duties, ensuring a positive outlook for the government's overall tax revenue in the current fiscal year.