October fails to cheer in a year of tax buoyancy
Cumulative collections from major tax revenues such as corporation tax, central GST, excise duty and customs duty before devolution to the states dipped marginally in October 2023.
Amid the higher-than-expected growth figures in Q2 of the current financial year, comes a small dampener – one that pertains to the first month of the next quarter. Cumulative collections from major tax revenues such as corporation tax, central GST, excise duty and customs duty before devolution to the states dipped marginally in October. As a result, total tax receipts crawled down by 1.2% and stood at Rs 2.15 lakh crore. The total tax receipts collected in October of FY23 was Rs 2.18 lakh crore.
The dip would have been worse had it not been for a rescue act staged by personal income tax that rose a whopping 31.1% compared to the same period in FY23. It stood at Rs 69,583 crore for October this year while the same monthly last year collected Rs 53,057 crore according to a report by the Business Standard quoting Controller General of Accounts data that was published on November 30.
Corporation tax declined by more than 13% and stood at Rs 30,686 crore in October. Last year, this item had netted Rs 35,279 crore in the same month.
Customs duty collections took a heavy beating. It went down 50% to reach Rs 18,200 crore against Rs 36,659 crore in October last year.
Central excise duty fell 1.2% and was at Rs 25,457 crore against Rs 25,778 in the same period last year.
Even GST – collections of which are much talked about – could not be of help. CGST was at Rs 70,510 crore – down 2.4% against Rs 72,219 crore in October 2023.
The picture was better if one considered the April-October period. Cumulative tax mop-up went up 14% and stood at Rs 18.3 lakh crore. Last year, the amount was Rs 16.1 lakh crore in the same period. In the seven-month-period, only Central excise duty went down this year compared to corresponding period of 2022-23. The duty yielded 9.3% lower revenue (at Rs 1.5 lakh crore compared to Rs 1.6 lakh crore last year).
The figures of the Comptroller and Auditor General are used to understand the state of government finances.
However, the government was successful in reining its fiscal deficit at 4.9% of GDP in H1 (April-September) of FY24. According to the Union budget projections, the fiscal deficit would stand at 5.9% of the GDP in FY24. The success of the government was due to tax revenue buoyancy which brought the FD down to 3.5% in Q2 against 6.4% in Q1.