India’s tax collections continued to grow at a healthy rate in January, suggesting that the government is on track to achieve its revised tax target for the current fiscal. The government's net indirect tax collections grew 16.9% year on year in January, with customs, central excise and service tax collections growing 10.1%, 26.3% and 9.4%, respectively, a finance ministry statement said on Friday.

“While the growth remains healthy, there has been a slowdown in the pace of expansion of excise duty and service tax collections in January 2017 compared to the nine months ending December 2016," said Aditi Nayar, principal economist at ratings agency ICRA Ltd. “Nevertheless, the revised estimates for FY2017 for indirect tax collections of the GoI (Government of India) are likely to be achieved,” she said.

Net indirect tax collections in the first 10 months of this fiscal stood at Rs 7.03 lakh crore, which is 23.9% more than the net collections a year earlier.

The government has targeted gross tax revenues of Rs 17.03 lakh crore for 2016-17. Direct tax collections for the current fiscal up to January have grown 10.8% year on year at Rs 5.82 lakh crore. Corporate income tax grew by 11.7%, while personal income tax by 21.0%.

However, after adjusting for refunds, the net growth in corporate income tax collections in the first 10 months of the fiscal is 2.9% while net personal income tax collections have grown 23.1%.

Refunds amounting to Rs 1.41 lakh crore have been issued during April 2016-January 2017, which is 41% higher than the refunds issued during the corresponding period last year.

Indirect taxes growth is expected to slow down from February when the positive impact of the hikes in excise duty on fuels from November 2015 to January 2016 fades away. Nayar said this would result in further moderation in growth of excise collections.