Manufacturing sector inactivity hits in direct tax in April-December period of this financial year
GN Bureau | January 24, 2015
Reflecting dull manufacturing activities, indirect tax receipts growth has been below par while direct tax collection growth has been in double figures in the April-December period of this financial year. Anticipating such a fall the government has been increasing excise duty on petrol and diesel coinciding with price cuts of these products.
The growth target set for indirect tax collection is 20 per cent. But in real terms, excise, customs and service tax collection grew by just 6.7 per cent in the April-December period.
As per data released by the finance ministry on Friday, the income tax department collected Rs 5.5 lakh crore from corporate, personal and wealth taxes, 12.9 per cent more than what it had collected in the same period a year ago. However, on account of tax refunds, net direct tax receipts is being pegged at a slower pace of 7.41 per cent, as the government had set a 15.7 per cent growth target for gross direct tax.
In the direct tax basket, gross corporate tax collection in the first three quarters of the financial year grew 12.8 per cent from a year ago to Rs 3.5 lakh crore. Gross personal income tax receipts, too, grew by 12.6 per cent to Rs 1.9 lakh crore in the first three quarters of this fiancial year.
Receipts from securities transaction tax (STT) grew 43.4 per cent in the same period to Rs 4,940 crore. Collections by way of advance tax grew 13 per cent while receipts by way of tax deducted at source grew at 7.84 per cent in the first three quarters.
The economic growth is projected to be in the range of 5.4% to 5.9% in the current fiscal. The economic growth in first half (April-September) of this fiscal was 5.5%.
The actual tax mobilisation through direct and indirect taxes in current financial year would depend on factors such as growth in GDP and performance of the economy in the remaining part of the current fiscal.
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