Economic Recovery On Track: After Strong GST Mop-Up, Direct Tax Collections Post 31% Growth

Direct Tax Collections Between April 1 and November 10: In an indication of an economic recovery, gross direct tax collections (corporate and individual income tax earnings) saw a jump of 30.69 per cent to Rs 10.54 lakh crore so far in the current fiscal year, according to the latest official data. Personal income tax (including securities transaction tax) collections jumped 41 per cent, while corporate tax revenues rose 22 per cent.

Tax collection is an indicator of economic activity in any country. Tax on corporate and individual income makes up for direct taxes. On the indirect tax front, GST revenues rose 16.6 per cent to about Rs 1.52 lakh crore in October, making it the second-highest collection ever.

Gokul Chaudhri, partner at Deloitte India, said, “The strong tax collection augurs well for public finances and reflects that the measures to spur the economy and investment are yielding results. The strong revenue collection comes after tax reforms like GST and corporate tax rate competitiveness.”

Direct tax collection, net of refunds, stands at Rs 8.71 lakh crore which is 25.71 per cent higher than the net collections for the corresponding period of last year. This collection is 61.31 per cent of the total budget estimates of direct taxes for FY 2022-23.

“Direct tax collections up to November 10, 2022, show that gross collections are at Rs 10.54 lakh crore, which is 30.69 per cent higher than the gross collections for the corresponding period of last year. ,” the Ministry of Finance said in a statement on Friday.

After adjusting refunds, the net growth in corporate income tax (CIT) collections stood at 24.51 per cent and that in personal income tax (PIT) collections was 28.06 per cent (PIT only) and 27 per cent (PIT, including securities transaction tax).

The Budget had estimated direct tax collection at Rs 14.20 lakh crore this fiscal, higher than Rs 14.10 lakh crore collected last fiscal (2021-22).

Meanwhile, on the indirect tax front, GST revenues rose 16.6 per cent to about Rs 1.52 lakh crore in October, making it the second-highest collection ever. GST collections had touched a record high of nearly Rs 1.68 lakh crore in April. In October last year, the revenues stood at over Rs 1.30 lakh crore.

The gross GST collected in the month of October 2022 is Rs 1,51,718 crore of which Central GST is Rs 26,039 crore, State GST is Rs 33,396 crore, Integrated GST is Rs 81,778 crore (including Rs 37,297 crore collected on import of goods) and Cess is Rs 10,505 crore (including Rs 825 crore collected on import of goods), which is second highest till date, an official statement said.

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