The gross tax revenues have touched 65 per cent of the Budget estimates at Rs 17.81 lakh crore during the first eight months of the current fiscal till November, propelled by corporate and personal income tax mop-up, according to the Economic Survey 2022-23 presented in Parliament on Tuesday.
The survey, authored by Chief Economic Advisor V Anantha Nageswaran, said the 'substantial reforms' in India's taxation ecosystem post-2014 and policy reforms have removed the distortionary incentives from the economy.
Reforms like GST, reduction in corporate taxes, exemption of sovereign wealth funds and pension funds from taxes, and removing Dividend Distribution tax have reduced the tax burden on individuals and businesses.
Direct taxes, which broadly constitute half of the Gross Tax Revenue, have registered a growth of 26 per cent from April to November 2022, enabled by corporate and personal income tax growth.
The growth rates observed in the major direct taxes during the first eight months of the current fiscal were much higher than their corresponding longer-term averages, the survey said.
During April-November 2022, the government's gross tax revenue mop-up stood at Rs 17.81 lakh crore or 64.6 per cent of the full-year target of Rs 27.58 lakh crore.
Of this, direct tax collection is Rs 8.67 lakh crore and indirect tax collection is Rs 8.91 lakh crore.
The Centre's Goods and Services Tax (GST) collection till November 2022 was Rs 5.57 lakh crore.
This was 71.5 per cent of the full year Budget estimates of Rs 7.80 lakh crore.
The survey said that tax revenue buoyancy has been sustained over the last two years.
After plummeting during the pandemic-affected year FY21, revenue receipts registered robust growth in 2021-22 led by a rebound in the collection of all major direct and indirect taxes (except excise duties) in FY22.
"Last year's revenue buoyancy momentum is continuing into the current year.
"The Gross Tax Revenue registered a YoY growth of 15.5 per cent from April to November 2022, and the Net Tax Revenue to the Centre after the assignment to states grew by 7.9 per cent on a YoY basis," the Economic Survey said.
On GST, the survey noted that the average monthly gross GST collection has increased from Rs 90,000 crore in FY18 to Rs 1.49 lakh crore in FY23.
Evidence suggests that the buoyancy of the indirect tax system replaced by GST has improved in the post-GST regime.
Since other tax reforms, such as the corporate tax cut, were followed by the pandemic-led uncertainty and disruptions, their impact on collections is gradually becoming visible in higher tax collections.
It said that one prominent reason behind the higher revenue buoyancy is the introduction of technology-backed tax governance reforms for simplifying tax processes, enhancing compliance and improving fraud detection systems.
The faceless assessment and appeal systems no longer require a physical interface between taxpayers and the Income Tax department.
The decision to share data and information between CBDT and CBIC on an automatic and regular basis is a promising reform, and it would result in efficiency gains in the tax system.
These reforms augur well for future economic growth and future resource mobilisation in the economy.
