NEW DELHI/BENGALURU : Playing down reports of economic slowdown in the wake of demonetisation, Union finance minister Arun Jaitley on Monday released robust tax figures till December, which showed collections have gone up significantly in the first nine months of this financial year.
“All these stories and reports are anecdotal. The growth figure does not depend on anecdotal basis... Statistics and taxation figures are real. This is the money which has come in,” he said.
Net direct tax collections between April and December 2016 stood at `5.53 lakh crore – a good 12.01 per cent growth compared with the same period last year – constituting 65.3 per cent of the Budget estimate for FY17.
Indirect taxes fared even better, soaring a whopping 25 per cent during the April-December 2016 period to `6.3 lakh crore. With this, 81 per cent of the target for the current financial year has been achieved.
In terms of gross revenue collections, corporate income tax grew 10.7 per cent, while personal income tax swelled 21.7 per cent. Refunds were also higher this year at `1,26,371 crore — a 30.5 per cent growth over the previous year.
What explains the spike in tax collections? According to tax expert Sachin Menon, partner and head of indirect tax at KPMG, the increase in credit and debit card transactions could be one of the reasons. “The transaction declared has gone up, which perhaps has reflected in an increase in the collection,” he said.
Central excise and service tax collections expanded 31.6 per cent and 12.4 per cent, respectively, in December 2016 against the same period in 2015. Customs duty receipts, however, reported a fall of 6.3 per cent. This, according to the finance ministry, was due to the decline in gold imports (Gold import volumes had gone down 46 per cent in December 2016, on a year-on-year basis.)
Demonetisation will not affect indirect tax collections, according to M S Mani, senior director, Deloitte Haskins & Sells. Indirect taxes, he noted, are levied on manufacture and provision of services offered. And, manufacturing and services have not come down.
“What people are talking of is about tax buoyancy — how much the tax has grown compared to GDP growth. If GDP grows at 7 per cent and tax also grows at 7 per cent, that is not known as buoyancy. But, if the GDP grows at 7 percent and tax grows at 10 per cent, then we can say tax grows 3 per cent buoyant,” he added.