You must be wondering why I said so. Undoubtedly, Tax collection is an indicator of economic activity in any country. But to have a deeper understanding of this, we first need to have a look on the DT collections of this year, and the estimated Budget Target that was set by the Honourable Finance Minister, Nirmala Sitharaman.
So what the target for this year was?
The Union Budget this year had set the direct tax collection target at Rs 14.20 lakh crore for the financial year ending March 2023.
After reading the Budget target you must be wondering what was the collection amount as per net and gross DT collections respectively.
Showing a healthy growth in tax revenues, India's net direct tax collection stood at Rs 7.45 lakh crore between April 1 and October 8, which surpassed over 52 percent of the Budget estimates of the current financial year (2022-23). Net direct tax is gross collections minus the refund.
The gross direct tax collections for the period under review stood at Rs 9.98 lakh crore, which is 23 percent higher than gross collections last year.
"Direct Tax collection, net of refunds, stands at Rs 7.45 lakh crore which is 16.3% higher than the net collections for the corresponding period of last year. This collection is 52.46 percent of the total Budget Estimates of Direct Taxes for FY 2022-23, the finance ministry said. Direct tax includes personal and corporate income tax.
So if the above DT collections are net of Refunds, what was the amount of Refunds issued by the government?
The answer is - Refunds amounting to Rs 1.53 lakh crore have been issued during April 1 and October 8, which are 81.0 percent higher than refunds issued during the same period in the preceding year, data showed.
And finally, like the collections of DT, let us quickly have a review of the collections of GST for the same.
Collection from levy of tax on goods and services sold (GST) has flattened at around ₹ 1.45-1.50 lakh crore per month.
Thus, with inflation reportedly running between 6-7 percent, it is imperative that the tax collections show a healthy growth above the inflation rate. - Rohinton Sidhwa, partner at Deloitte India.
The author is a Student at ICAI, and winner of the National Conference Of Indore, 2022 in the Technical Session of GST. She has contributed articles in various branches of ICAI through it’s newsletters. She is also a Book Author and a Podcast Speaker. She has earned over 100K + views for her knowledgeable articles on Linkedin. For any professional queries, you can contact her on the same.
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