sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
General »
 RBI-Special Deposit Scheme (SDS)-1975 Payment of interest for calendar year 2018
 How senior citizens can avail tax break on interest income under Sec 80TTB a
 Listed companies paid a little less than a third of corporate tax in FY18
 Gifts received from relatives are not taxable
 Income tax return benefits: National Pension System (NPS) also offers this 'hidden' tax relief
 Big 4 audit companies may suffer revenue hit due to conflict of interest norms
 How much tax do you pay on your bond investments?
 Companies rush to reconcile financial results with state wise audit, seek extension of deadline
 Interim budget may include income tax announcements, says report
 All you need to know about tax benefits for senior, super senior citizens
 Where to invest money for the short term

Demonetisation impact on government tax revenue marginal; direct tax personal income grew at above budget estimates
February, 13th 2017

Whatever the government or its detractors say, the demonetisation move announced on November 8 has had little impact either way on the Centre’s tax revenue in the current fiscal year.

Whatever the government or its detractors say, the demonetisation move announced on November 8 has had little impact either way on the Centre’s tax revenue in the current fiscal year. Neither has the two income disclosure schemes (IDS and PMGKY) unveiled during the year affected revenue much.

Direct taxes (corporate tax and personal income tax) grew at slightly above the budget estimates before the note swap and after it. The growth has picked up a bit further in November on the strength of personal income tax (advance tax payments using old notes could be a part-reason for this) but has since gradually slowed down, still keeping a slightly higher pace than before the note swap, at least until January.

But it is excise and service tax that have consistently outperformed official estimates by wide margins — these taxes seem to even better the substantially scaled up revised estimates (REs) announced in the recent Budget.

The extremely robust increase in excise collections and the solid growth in service tax in the year have almost entirely to do with rate hikes (2016-17 saw the full impact of incremental duty hikes on petroleum products and the increases in the rate at which services are taxed since 2015-16 Budget), rather than buoyancy. Unlike in the case of direct taxes, if at at all there is any impact of the note swap on excise and service tax, it could be negative (see table).

In short, the April-January 2016-17 tax collections — post-refunds and tax credits — grew 17.7% year-on-year, against the RE of 17.1% for the whole year. The originally budgeted growth was 10.74%. As for direct taxes, only 68.7% of the estimated revenue in the full year was achieved till January-end; however, a shortfall against the RE of R8.5 lakh crore is unlikely, as the March window for payment of advance taxes will be used by corporates, other firms and individuals. In April-January, corporate taxes grew 11.7% against the 2016-17 RE of 9% while personal income tax collections rose 21% against RE of 22.8%.

It is pertinent to mention that the government has kept the RE for corporate tax unchanged from the corresponding BE in the latest Budget and revised the personal income tax revenue only marginally from Rs 3.46 lakh crore (BE) to Rs 3.53 lakh crore (RE). The reason could be lack of clarity on nominal GDP growth for 2016-17 and, therefore, for the next year. The Centre has accounted for a robust 25% increase in personal income tax for 2017-18, hinging on additional tax revenue to be generated by income disclosures.

With 82.8% of the indirect tax receipts target (RE) for 2016-17 already achieved by January-end (the growth rates have been higher than REs), these could even overshoot the annual target.
The Centre’s gross tax revenue is estimated at Rs 17 lakh crore in 2016-17 as against Rs 14.6 lakh crore in 2015-16

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions