Finance Minister Arun Jaitley has expressed confidence that government will exceed its budget estimate of Rs 16.3 lakh crore for both direct and indirect tax collections this year. In the Budget for 2016-17 fiscal, Jaitley had put gross tax revenue estimate at Rs 16.3 lakh crore, about 11 percent higher than gross tax receipts of Rs 14.5 lakh crore for the previous fiscal. Of total estimate, 12.64 percent growth in direct tax to Rs 8.47 lakh crore and 10.8 percent in indirect tax at Rs 7.79 lakh crore.
Jaitley’s statement came after many states expressed concern about the fall in value-added tax revenues for the last two months on account of demonetisation’s impact on businesses. Responding to statements made by West Bengal finance minister Amit Mitra on the massive impact of demonetisation on tax revenues, Jaitley said that this trend is not reflected in all states. On digital economy, he said that his assessment is that the larger integration of informal economy with the formal economy that will happen in the following quarter which will lead to higher revenues of all and this is the purpose of this exercise.
As per the data, during April 1-December 19, indirect tax collections, which are made up of Central excise, customs and service tax, has shown a 26.2 percent jump to Rs 5.52 lakh crore as compared to the year ago collections. This constituted 71.1 per cent of the Budget estimate. On other hand, direct tax collections, which are made up of individual income tax and corporate tax, jumped to Rs 5.57 lakh crore to meet 65 percent of the Budget estimates.