NEW DELHI: While the economy is still a fair distance away from convalescing to pre-Covid stature, the Finance Ministry is confident that better compliance and the increased scrutiny would help in revenue collection in the coming months.
Finance Secretary Ajay Bhushan Pandey told TNIE that collection can go up just by improving compliance.
"We have seen this in GST collection, which hovered around Rs 95,000 crore before taking a leap last month to Rs 1,20,000 riding on the back of better compliance", he said, adding: “We are working on data analytics to launch targeted action against outliers. We see the momentum of revenue collection to improving in future,” Pandey said.
Admitting that there would be a gap in GST compensation in the next financial year as well, he added that it would be much lower than the current year’s.
“The GST numbers are estimated after taking the Covid pandemic into account. However, a decision will be taken later on how to compensate states for FY22 shortfall as the borrowing mechanism offered to states in lieu of compensation is only for FY21 shortfall,” Pandey said.
The Finance Ministry last year allowed states to meet GST compensation shortfall of Rs 1.1 lakh crore via a special borrowing window.
The Budget 2021-22 has pegged Centre’s revenue from GST at Rs 6,30,000 crore, a 22 per cent growth over the revised estimate for FY21 at Rs 5,15,100 crore.
It is lower than the FY21 budget estimate of Rs 6,90,500 crore, which experts say are understated.
“I do not subscribe to speculations that revenue numbers are understated. We have shown a growth of 16.7 per cent. It is an estimate after taking into account the nominal growth rate, which has been projected somewhere between 14 to 15 per cent and on that we have put this tax buoyancy of 1.15 percent. That’s how we reached the figure of 16.7 per cent,” Pandey said.
Commenting on the status quo in the personal income tax, the finance secretary said that the government is working on stability of tax. According to him, tinkering the rate every time budget is announced is not the correct way to see it.
“Stability of rates is very necessary whether it is a corporate tax rate or whether it is a personal income tax or whether it is a GST or whether it is a custom duty. I am of the view that the budget is a much bigger statement than merely the adjustment in the tax rate,” Pandey said.