Data drive: The FY21 tax suprise – The Financial Express

Clipped from: https://www.financialexpress.com/opinion/data-drive-the-fy21-tax-suprise/2234816/

The Centre’s indirect tax collection grew 12%, to Rs 10.71 lakh crore, in FY21 on the back of higher collection from central excise (led by taxes and cesses on petroleum products as well as the recovery in consumption in the second half of the year).

taxDespite merchandise imports declining 18% to $389 billion in FY21, the increase in mop-up from customs duties was due to the hike in customs duties on certain items such as automobiles and their parts.

The Centre’s indirect tax collection grew 12%, to Rs 10.71 lakh crore, in FY21 on the back of higher collection from central excise (led by taxes and cesses on petroleum products as well as the recovery in consumption in the second half of the year). While collection from customs grew 21% year-on-year, the mop-up from GST declined by 8.5% in FY21 due to Covid-19 induced lockdown in the first half of the year, show the preliminary figures released by the finance ministry. However, in the second half of the financial year, collection from GST crossed Rs 1 lakh crore each month and, in March, it went up to Rs 1.24 lakh crore.

Despite merchandise imports declining 18% to $389 billion in FY21, the increase in mop-up from customs duties was due to the hike in customs duties on certain items such as automobiles and their parts. However, direct taxes declined 10% due to a fall of 18% in corporate taxes. As a result, the Centre’s overall tax collection touched Rs 20.2 lakh crore in FY21, as compared with Rs 20 lakh crore in the previous year. This year-on-year growth in overall tax collection in FY21 is remarkable given the fact that the nominal GDP is likely to have contracted 3.9% in the year.

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