Dismissing economic slowdown concerns due to demonetisation, Finance Minister Arun Jaitley has said that higher tax mop up shows uptick in economic activity including manufacturing during the April-December period. He said that during April-December 2016, direct tax collection was up by 12.01 per cent at Rs 5.53 lakh crore, as compared to revenue in the year-ago period, while indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore.
Jaitley said that during the 9-month period the direct tax collections have moved up and the indirect tax collections have also significantly increased. He also said that since there has been a considerable debate as to the impact of the currency squeeze in November and December, the revenue data becomes relevant. He added that VAT collections in most states too have shown an increase and they also received taxes in the old currency in November.
The Minister highlighted that in December, payment of taxes in old notes was not allowed and over 99 per cent central taxes were paid digitally. He also said that the demonetised notes had no role to play in the tax collections for December as people were allowed to pay taxes in the spiked currency only in November.