The government expects the direct tax collection to fall short of the budget target of Rs 7.9 lakh crore this year, but hopes to make good of the shortfall through higher indirect tax collection.

In a video message sent to media, Revenue Secretary Hasmukh Adhia said that the government hopes to collect Rs 40,000 crore more than the Budget target of Rs 6.4 lakh crore through indirect taxes. Till January 2016, the government has collected Rs 5.44 lakh crore through indirect taxes, which is 88 per cent of the budget target.

However, the total direct tax collection has been Rs 5.22 lakh crore, which is 65 per cent of the budget target of Rs 7.9 lakh crore. The growth in direct tax collection has been 10.9 per cent so far compared to 33 per cent growth in indirect tax collection.

Overall, the government has achieved 73.5 per cent of the total targeted tax collection of Rs 14.4 lakh crore. Adhia said that they hope to achieve the Budget tax collection target.

The growth in indirect tax collection has been aided by an increase in service tax from 12.5 per cent to 14 per cent and higher excise duty on petroleum products.

According to Adhia, corporate tax collection has witnessed a growth of 10.44 per cent, while personal tax collection has increased 11.85 per cent so far in the current financial year till January 2016.

Adhia said that strong growth in customs duty collection in electric machinery (34.4 per cent) and all other machinery (27.8 per cent) indicates higher investments taking place in the country.

He further said that they witnessed the average growth in revenue from service sector at 27.2 per cent, while that from banking and financial services at 44.6 per cent , works contract 39.9 per cent, goods transportation services at 41 per cent. He says that all these indicate improved business activities in the country.