Indirect tax collection exceeds revised target

Indirect taxes, which are paid by taxpayers on the consumption of goods and services, include GST, Customs and Excise Duty, also recorded a 12% growth over the actual collection during the FY 2019-20. The GST was the biggest contributor with the collection of Rs 5.48 lakh crore that is over 51% of the total indirect tax collected by the Centre in the last fiscal. It includes the Central GST, the Integrated GST and GST Compensation Cess, writes ETV Bharat's Deputy News Editor Krishnanand Tripathi.

New Delhi:The indirect tax collection for the last financial year stands at around Rs 10.71 lakh crore, an increase of 8.3% over the revised target of Rs 9.89 lakh crore, showed the provisional data released by the ministry of finance on Tuesday, reflecting much better buoyancy than anticipated by the government at the time of presentation of budget this year.

Indirect taxes, which are paid by taxpayers on the consumption of goods and services, include GST, Customs and Excise Duty, also recorded a 12% growth over the actual collection during the FY 2019-20.

In 2019-20, the Government collected Rs 9.54 lakh crore as indirect taxes and despite the Covid-19 global pandemic, which is expected to cause a decline of nearly 8% in the country’s gross domestic production last year, it recorded a growth of Rs 1.17 lakh crore, an increase of 12.3%.

The GST was the biggest contributor with the collection of Rs 5.48 lakh crore that is over 51% of the total indirect tax collected by the Centre in the last fiscal. It includes the Central GST (CGST), the Integrated GST (IGST) and GST Compensation Cess.

GST collection improves in the last 6 months

Due to strict enforcement measures adopted by the government since November last year, the GST Collection also exceeded the revised target of Rs 5.15 lakh crore, an increase of 6.4%.

However, despite overall buoyancy in the indirect collection last year, the GST collection declined to Rs 5.48 lakh crore in 2020-21 against the collection of Rs 5.99 lakh crore in FY 2019-20, a decline of Rs 51,000 crore or 8.5%.

“The GST collections were severely affected in the first half of the financial year on account of Covid. However, in the second half, the GST collections registered a good growth and collections exceeded Rs 1 lakh crore in each of the last six months,” said the ministry of finance.

As a result of a nationwide drive against the use of fake GST bills to fraudulently claim the input tax credit (ITC), the GST collection was over Rs 1 lakh crore during the last six months and touched an all time high of Rs 1.24 lakh crore in March this year.

The finance ministry said it was due to several measures taken by the Central Government that helped in improving compliance.

Excise collection saves the day

The Excise Duty, which the Centre collects on the production of goods, showed the biggest jump in the collection during the last fiscal. The Centre’s excise duty collection jumped by 59%, from Rs 2.45 lakh crore in 2019-20 to Rs 3.91 lakh crore in FY 2020-21, an increase of Rs 1.46 lakh crore.

Excise duty levied on the production of petrol and diesel is a significant source of revenue for the Centre.

According to the latest information available on the Petroleum Planning and Analysis Cell’s (PPAC) website, the Centre’s excise duty collection is expected to be Rs 2.36 lakh crore in the last fiscal, which would amount to over 60% of the total excise duty collection of the government last year.

Last year, the Centre raised excise duty on petrol by Rs 13 per litre and on diesel by Rs 16 a litre in two tranches. It took the total incidence of excise duty on petrol to Rs 32.98 per litre and on diesel to Rs 31.83 a litre, an all time high.

Growth in Customs Duty collection

In FY 2020-21, the Customs Duty collections also showed a significant jump of over 21% in comparison with the collection during the previous year as it went up to Rs 1.32 lakh crore from Rs 1.09 lakh crore in FY 2019-20.

The Centre collects Customs Duty on import of goods. The finance ministry said the numbers released on Tuesday were provisional numbers subject to correction.