India’s indirect tax collection was up by 22.2% while direct tax mop up was higher by 10.7% during April-February 2016-17, the finance ministry said on Friday, indicating the economy weathered the demonetisation impact and improvement in compliance among taxpayers.
The robust tax collection will also help the government to stick to its fiscal deficit target of 3.5% of GDP in 2016-17.
While indirect tax receipts were at 7.72 lakh crore, direct tax mop up was at Rs 6.17 lakh crore. The total tax collection comes to about Rs 13.89 lakh crore.
The excise duty collection was up 36.2% at Rs 3.45 lakh crore while service tax mop up was higher by 20.8% at Rs. 2.21 lakh crore during April-February 2016-17.
However, customs was up just 5.2% at Rs 2.05 lakh crore, the ministry said in a series of tweets.
In case of direct taxes, corporate tax receipts were higher by 11.9% and income tax by 20.8%.
In his Budget speech on February 1, finance minister Arun Jaitley projected the tax receipts at Rs 12.27 lakh crore for 2017-18, or 12.7% higher than the revised estimate of Rs 10.89 lakh crore of this fiscal year.
A robust tax collection is expected to help the government narrow the fiscal deficit to 3.2% of GDP in 2017-18 from 3.5% this financial year.
The robust tax collection comes amid the demonetisation drive initiated after Prime Minister Narendra Modi on November 8 announced scrapping of old Rs 500 and Rs 1,000 notes to fight the menace of black money, corruption and terror funding.
CSO estimates India’s GDP growth at 7.1% for 2016-17, slowing from 7.9% of last year, as demonetisation crimped consumption and investment for at least two months.