The government expects indirect tax collection to be lower than the Budget Estimate (BE) of Rs 13.38 trillion this fiscal year, despite prospects of netting goods and services tax (GST) in large amounts, Revenue Secretary Tarun Bajaj has said.
“Indirect tax collection may see lower realisation than budgeted on account of cuts in excise and customs duties.
"We could see a shortfall of about Rs 1.5 trillion on account of those,” he told Business Standard.
The government had last month cut excise duties on petrol and diesel and exempted Customs duties on items such as sunflower and soybean oil to rein in inflation.
The retail price inflation rate surged to around an eight-year high of 7.79 per cent in April.
On direct tax collection, Bajaj said: “Advance tax collection (due for June 15) would see some impact due to expected reduction in collection from oil-marketing companies, which are one of the major contributors.”
However, he said more clarity would come in by mid-June.
Amid a surge in global crude oil prices, oil-marketing companies have taken a hit because they are not able to pass on the entire burden to consumers.
Advance tax is paid as and when money is earned in four instalments rather than at the end of the fiscal year.
It is considered an indicator of economic sentiment.
The secretary said the government was hopeful on GST collection.
“Hopefully, it will be better than budgeted and could see average monthly collection in the range of Rs 1.4-1.5 trillion,” Bajaj said.
GST collection, which included the state portion of the tax, touched a record of Rs 1.67 trillion in April, followed by Rs 1.41 trillion in May.
The government had projected indirect tax collection at Rs 13.38 trillion in the BE this fiscal year.
After excise and customs duty cuts, it may come down to Rs 11.88 trillion.
The target for direct tax collection for FY23 is Rs 14.20 trillion.
As on May 31, Centre net collection stood at Rs 1.95 trillion, according to sources.
Tax collection had been projected at Rs 27.58 trillion in BE for FY23.
That represents 9.6 per cent growth over the Rs 25.16 trillion pegged in the Revised Estimates (RE) in the previous year.
However, collection surpassed the RE to touch Rs 27.1 trillion.