Weeks before it presents Budget for the next fiscal, the government on Wednesday said it will achieve the tax revenue target for the current year with larger-than- budgeted indirect tax collections making up for a possible shortfall in direct taxes.
After two successive years of revising downward the tax revenue target, fiscal 2015-16 which ends on March 31 is likely to see tax revenue target of Rs 14.49 lakh crore being met.
"We are likely to exceed the collection in Indirect Tax by about Rs 40,000 crore in the current year. On the whole, we are optimistic of close to 100 percent achievement of overall tax revenue target of the year," Revenue Secretary Hasmukh Adhia tweeted.
Of the Rs 14.49 lakh crore tax revenue target, Rs 7.97 lakh crore was estimated to come from direct taxes (corporate and income tax) and another Rs 6.47 lakh crore from indirect taxes (customs, excise and service tax).
He said the tax collections between April-January show an increase of 33 percent in Indirect Tax and 10.9 percent in Direct Tax.
"Both put together, we have achieved 73.5 percent of BE target," Adhia said. BE is Budget Estimate.
Last fiscal, the government had targeted Rs 13.64 lakh crore in tax revenues but at the end of the year it was revised downwards to Rs 12.51 lakh crore.
That year direct tax collections were Rs 7.05 lakh crore, short of Rs 7.36 lakh crore target. Indirect tax revenues at Rs 5.42 lakh crore too were short of the target of Rs 6.24 lakh crore.
In 2013-14, tax collection targets were revised downwards to Rs 11.58 lakh crore from budgeted Rs 12.35 lakh crore.
In the current fiscal, the growth in Custom Duty revenue on electrical machinery was 34.4 percent and in other machinery it was 27.8 percent.
"These are indicators of new investment taking place in private sector," Adhia said.
In the Services Sector, as against 27.2 percent average growth rate, the growth rate in banking and financial services was 44.6 percent.
In work contract services it is 39.9 percent and in goods transportation services growth rate is 41 percent.
"These are also indications of high level of economic activities happening," Adhia said.