The finance ministry said on Wednesday that tax collections stood at Rs 10.7 lakh crore in the first 10 months of FY16. This constituted 73.5 per cent of the Budget estimates (BE) of Rs 14.5 lakh crore.
According to the ministry, direct tax collections might fall short of the Budget target of about Rs 8 lakh crore in FY16 but it would be offset by robust indirect tax collections. As such, direct tax collections might have a lower figure in the revised estimates of 2015-16, compared to BE, while the indirect tax mop-up would have a higher figure than BE of Rs 6.5 lakh crore. The ministry hoped it would meet tax collections target in FY16. Read our full coverage on Union Budget 2016
Amid critics doubting the latest gross domestic product (GDP) numbers, which showed the economy growing 7.6 per cent in FY16, Revenue Secretary Hasmukh Adhia said the latest tax figures supported the GDP data. On the first upload on YouTube by the finance ministry, Adhia said direct tax collections were up 10.9 per cent at Rs 5.2 lakh crore till January of FY16 over that in the year-ago period, while indirect tax mop-up grew 33 per cent to Rs 5.4 lakh crore. Within direct tax collections, corporate tax rose 10.4 per cent and personal income tax by 11.8 per cent.
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The government has achieved 65 per cent of BE direct taxes in this period. Indirect tax collections in the first 10 months constituted 80 per cent of BE for 2015-16. The revenue department expects an additional Rs 40,000 crore to come in from indirect taxes, which will offset the shortfall in direct tax mop-up. Analysing the trend in tax collections, Adhia said electrical machinery delivered 34.4 per cent higher Customs duty collections till January, compared to what it yielded in the corresponding period of the previous year. Similarly, imports of “other machinery” brought in 27 per cent higher revenues from Customs duty.
Assessing the trending of growth in services sector, the average growth of service tax stood at 27.2 per cent during the first 10 months of 2015-16 on a year-on-year basis.
Among the various sub-segments, bank and financial services saw service tax rise 39.9 per cent. Similarly, goods transport and services yielded 41 per cent higher service tax collections in the said period. The recent advance estimates released by the Central Statistical Office showed financial, real estate and professional services have been rising substantially.