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- Narendra Modi Government May Collect More Than Budget Tax Collection Target
Mumbai3 hours ago
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- Excise duty on petrol increased from 19.98 to Rs 32.9 in April 2020.
- Similarly, on diesel it was increased from Rs 15.83 to Rs 31.8 per liter.
The central government can collect more tax than the target for the current financial year i.e. from April this year to March next year. This is because the government has collected gross tax of Rs 5.6 lakh crore in the first quarter. The government’s target for the full year is Rs 22.2 lakh crore.
Estimates in Icra’s report
Rating agency Icra has expressed such hope in a report. It has been said that the indirect tax will remain high during this period. The government has set a target of 9.5% growth in tax collection this year. In the financial year 2021, the government had collected tax of Rs 20.2 lakh crore. However, despite the second wave, the government has made good tax collection in the April-June quarter.
5.6 lakh crore collection in April-June
The tax collection of Rs 5.6 lakh crore in the April-June quarter is 39% higher than the June quarter of 2019-20. This has been the year before Corona. That is, the tax collection has become more than the earlier level of Corona. The revenue department is still not officially released the data collection. The Finance Ministry had said in the Lok Sabha on July 19 that in the first quarter, there was a tax collection of Rs 5.6 lakh crore.
94,181 crore received from excise on fuel
The Finance Ministry also said that about Rs 94,181 crore was received from excise duty on petrol and diesel in the first quarter. Aditi Nair, head of ICRA, said that this time in comparison to the first wave of Corona, we expect the gross tax revenue to exceed the target in the current financial year. Indirect tax will be the main reason for higher tax. It is mainly found in petroleum products.
2.7 lakh crore tax collection
According to him, in the June quarter of last year i.e. in 2020-21, the tax collection was Rs 2.7 lakh crore. That was the initial phase of the first wave of Corona. Then there was a lockdown in the whole country. In comparison, this time the tax collection in April-June has been 107% more. However, what is more important is that it is 39% more than the previous year of Corona.
At 22% compared to multiple tax estimates
He said that while Corporate Tax, Personal Income Tax and Central GST Tax has been at 21-22% in the first quarter as compared to the budget estimate. Excise and Customs collection has already been 30% higher than the budget estimate. The tax on fuel has been a major part of this. Along with this, recovery in international business has also contributed.
GST Compensation Cess 24,600 Crore
Apart from this, the GST compensation cess has also been Rs 24,600 crore in the first quarter. It has been 25% as compared to the budget estimate. This shows that the collection for the whole year may be Rs 1 lakh crore more than the budget estimate. On the basis of these numbers, ICRA estimates that the collection of budget estimates in the financial year 2021-22 can be exceeded very easily. Even if there is a 5% fall in collections in the next three quarters, it will be completed.
Target will be met despite lower taxes
Icra has said that even if the tax collection in the next three quarters is Rs 95 thousand crore less than the first quarter, even then there will be more collection than the target. Due to higher collections in the first quarter, the government can reduce the cess on petrol and diesel if it wants, which can boost consumption. On the other hand, it can also bring down inflation rates.
Tremendous increase in excise tax
In April 2020, the government increased the excise duty on petrol from Rs 19.98 per liter to Rs 32.9. On diesel, it was increased from Rs 15.83 to Rs 31.8 per liter. Due to this, in the financial year 2020-21, the government got a tax collection of Rs 3.35 lakh crore from diesel and petrol. A year before that it was Rs 1.78 lakh crore.