The Central Government’s net (post-refunds) direct tax collections has risen 95 percent on-year to Rs 3.7 lakh crore till 2nd September 2021, as against net direct tax collections of just Rs 1.9 lakh crore till 2nd September, 2020.
In order to meet the annual target of Rs 11.08 lakh crore receipts, the collections have to remain robust in the remaining period of the fiscal too, as it requires only a 17 percent growth.
Last year, the collections picked up in the second half of the year. The 1st April to 2nd September receipts were just 33 percent of the FY22 target of Rs 11.08 lakh crore. Refunds have picked up after being slow in the initial months of the current financial year. Refunds almost doubled to Rs 67,401 crore as on 31st August from about Rs 36,000 crore as on 30th June, 2021.
However, the Centre’s net tax receipts (including indirect taxes) rose 2.6 times on year to Rs 5.29 lakh crore or 32.2 percent of FY22 in the April-July period, compared with a mere 12.4 percent of the corresponding target reported in the year-ago period.
GST also is yielding the revenue productivity its proponents ascribed to it. The greater formalisation of the economy after GST implementation is also aiding direct tax receipts.