Net Indirect tax collection grew by 17%, Net Direct 10.8%
Rs 5.82 lakh crores were collected in direct-taxes between April and January of the last financial-year, 10.8% more in comparison to the corresponding period in 2015-16. Growth in direct-tax revenues predominantly comprised personal income-tax collection, that was higher by 21%. Net indirect tax collections in the same period stood at Rs 7.03 lakh crores, marking a growth of 23.9% over the previous April-January period.
What are direct and indirect taxes?
Direct taxes are levied on the income of an individual whereas indirect taxes are on goods and services. Net indirect taxes are indirect tax collections after subsidies. Income tax and wealth tax are direct taxes while excise duty is one among several indirect taxes.
Increase in excise duty collection in this fiscal
Tax officials collected net central excise duty of Rs 3.13 lakh crore as compared to Rs 2.23 lakh crore last year, clocking a growth of 40.5%. Net customs duty collections also grew by 4.7% to touch Rs. 1.86 lakh crore. Excise duty on petroleum products was hiked several times during the period to improve tax revenue when global oil prices were falling.
How is excise duty relevant to the economy?
Excise duty is levied on the manufacturer. Generally, higher excise duty collection is attributed to increased manufacturing activity and therefore, greater consumer demand. The proposed Goods and Service Tax, expected on July 1, would subsume various central and state-level indirect taxes, including the excise duty.
Tax revenue amounted to 83% of government estimates
For the ten months till January, Rs 7.03 trillion were collected in indirect taxes. This number makes up nearly 83% of the estimated indirect tax collections projected by the government. Service tax collections grew by 22% to touch Rs 2.03 trillion while customs tax revenue was up by 4.7% to mark Rs 1.86 trillion. These figures were recently released by the finance ministry.
