FY22 gross revenues at record; direct tax mop-up rises 49%

Gross tax collections surged to a new high of Rs 27.07 lakh crore in fiscal 2021-22, latest data by the Finance Ministry showed Friday. Marking a 33.5 per cent increase over last fiscal’s gross tax collections, the improved revenue buoyancy also reflected in the tax-GDP ratio increasing to over two-decade high of 11.7 per cent, said Revenue Secretary Tarun Bajaj.

Net tax mop-up in FY22 was Rs 18.22 lakh crore, a 27.8 per cent increase over the actual revenue collected in 2020-21, officials said.

Direct tax collections, net of refunds, rose by 49 per cent to Rs 14.10 lakh crore last fiscal, while indirect taxes posted a growth of 20 per cent to Rs 12.90 lakh crore.

“A lot of technology is being used where GST figures are now being matched with income tax figures and compliances are being ensured. So all this has resulted in better compliance and better revenues both in direct and indirect taxes,” Bajaj said. The tax-to-GDP ratio in FY22 jumped to 11.7 per cent , the highest since 1999. In 2020-21, the ratio was 10.3 per cent. “The direct taxes are more than indirect taxes (in 2021-22) and I hope this trend will continue in the coming years,” Bajaj added.

He said the overall tax buoyancy showed a “healthy, robust figure”. The tax buoyancy came in at about 2, which means the rate of growth in tax collection was around twice as fast as nominal GDP growth. Gross tax mop-up of Rs 27.07 lakh crore in April 2021-March 2022 exceeded the Budget Estimate by Rs 5 lakh crore and the Revised Estimate by Rs 1.91 lakh crore. The total collection was 34 per cent more than the Rs 20.27 lakh crore collected in the 2020-21 fiscal.

Corporate taxes grew 56.1 per cent to Rs 8.58 lakh crore, while personal income tax collection rose 43 per cent to about Rs 7.49 lakh crore. During the year, Rs 2.24 lakh crore of income tax refunds were issued to 2.43 crore entities.

In indirect taxes, while Customs collection rose 48 per cent to over Rs 1.99 lakh crore, CGST and cess mop-up grew 30 per cent to Rs 6.95 lakh crore. Excise collection, however, dipped 0.2 per cent to Rs 3.90 lakh crore in 2021-22.

Bajaj further said anti-GST evasion measures helped check the menace of fake invoices and businesses fraudulently claiming tax credit. For the estimates that have been provided in the Budget for FY23, Bajaj said it may not be possible to repeat such a high growth rate in the current financial year. It might be difficult to achieve the budgeted customs collection for the current fiscal as it may not be possible to fully restore the import duty on edible oils and pulses because of the rising prices, he said.

The government had reduced the Customs duty on edible oil and pulses in the last financial year with a view to containing spiralling domestic prices. Direct tax collection for the FY23, which began on April 1, has been pegged at Rs 14.20 lakh crore. This includes Rs 7.20 lakh crore from corporate taxes and Rs 7 lakh crore from personal income tax.

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