With all the criticism PM Narendra Modi & BJP Government has been facing over the economic slowdown, there comes a ray of hope that things are starting to look good. With the increase in net direct tax collection up to September 2017, economy might see an uptick in its growth rate after the bold moves of demonetization and a tax reform through GST.
Direct Tax collection grow by 15.8% till September 2017
The Central Board of Direct Taxes (CBDT) released the numbers on net (after paying the refunds) direct tax collection up to September 2017 which stands at Rs. 3.86 lakh Cr., 15.8% higher than the last year during first half of the fiscal year i.e. April – September.
The net direct tax collection constitutes 39.4% of the total direct tax estimates for FY2017-18.
The gross direct tax collection stood at Rs. 4.66 lakh Cr. which is 10.3% high than the last year. Thereafter the refunds issued till September 30 amounts to Rs. 79,660 Cr.
On the same lines, Advance tax of Rs. 1.77 lakh Cr. has been received till September which 11.5% higher than the last year’s collection.
Of the direct taxes received, Personal Income Tax (PIT) advance tax that includes the STT grew by 30.1% whereas as the Corporate Income Tax(CIT) advance tax were up by 8.1%.
In August too, CBDT had declared that the net direct tax collection grew by 17.5% to Rs. 2.24 lakh cr. as compared to last year from April to August.
Government’s Target of Rs. 9.8 lakh Cr.
In the budget speech, Arun Jaitley had declared that the direct tax collection target is set at Rs. 9.8 lakh Cr. and based on the usual timelines, the target would be met in the second half of the Fiscal Year since most people and companies do tax planning towards the end.
Government has touched the fiscal deficit at 96% of the budgeted estimates for FY2017-18 till August which was only 77% last year. While the government has for now kept its fiscal deficit target at 3.2%, it would be very difficult to achieve as there is a lot of pressure on government to spend and churn the economy for faster growth.
Net Direct Tax collections represent 39.4% of the total Budget Estimates of Rs. 9.8 lakh crore for the Direct Taxes for the F.Y. 2017-18.
— Ministry of Finance (@FinMinIndia) October 11, 2017
The growth in net direct collection has given some relief to the government in terms of economy starting to grow well as well as meeting its fiscal deficit target.
Now it remains to be seen if the indirect tax collection that includes GST would grow or not as that would set course for the BJP Government.