Business Standard

Revenue boost: FY23 net direct tax collection exceeds Revised Estimate

Mop-up could help govt meet its fiscal deficit target

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For FY24, central GST collection is projected to grow 12 per cent to Rs 9.56 trillion

Shrimi Choudhary New Delhi

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Direct tax collection rose 17.63 per cent to Rs 16.61 trillion in FY23, exceeding the Revised Estimate (RE) on this count slightly, the provisional data released by the finance ministry on Monday showed. Collection was Rs 14.12 trillion in FY22.

The strong growth reflects improved business performance amid external headwinds. The mop-up could help the government meet its fiscal deficit target for FY23.

The Budget Estimate (BE) for direct taxes in FY23 was set at Rs 14.20 trillion, and was raised to Rs 16.5 trillion in the RE. Provisional direct tax collection (net of refunds) has exceeded the BE by Rs 2.41 trillion, or 16.97 per cent, and the RE by 0.69 per cent.
 

Gross collection (provisional, before adjusting for refunds) in FY23 stood at Rs 19.68 trillion, showing a growth rate of 20.33 per cent over that in FY22 of Rs 16.36 trillion. In total gross collection, corporate tax accounted for over Rs 10 trillion, a growth rate of 16.91 per cent over Rs 8.58 trillion in the preceding year.

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Gross personal income tax collection —including securities transaction tax (STT) — grew 24.23 per cent to over Rs 9.6 trillion. This is despite the refund of Rs 3.07 trillion issued in FY23. This is against the refund of Rs 2.24 trillion a year ago.

The Centre has set a revised tax collection target of Rs 30.43 trillion for FY23. This includes both direct and indirect taxes. On indirect taxes, goods and services tax (GST) has crossed Rs 18 trillion, breaking all its previous records.

For FY24, central GST collection is projected to grow 12 per cent to Rs 9.56 trillion.

“Direct tax collection reflects the improving business performance, leveraging economic reforms and the rebound from the pandemic. The momentum is certainly encouraging … it should lead to greater confidence in the outlook for the new fiscal year,” said Gokul Chaudhri, president, tax, Deloitte India.

According to the latest data, the Centre’s fiscal deficit touched 82.8 per cent of the full-year target at the end of February due to higher expenses and lower revenue realisations.

The fiscal deficit -- the gap between expenditure and revenue -- during April-February stood at Rs 14.53 trillion, according to the data from the Controller General of Accounts (CGA).

The fiscal deficit in the comparable period of 2021-22 was 82.7 per cent of that year’s RE in the Budget. For 2022-23, the government expects the deficit at Rs 17.55 trillion, or 6.4 per cent of GDP.

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First Published: Apr 03 2023 | 9:50 PM IST

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