Economy

Tax collections up, demonetisation has not hit economy: Jaitley

Union Finance Minister Arun Jaitley addresses a press conference in New Delhi.  

Finance Minister Arun Jaitley on Monday dismissed concerns of slowdown due to demonetisation. He said both direct and indirect tax collections had shown a robust increase during the April-December period, indicating a rise in economic activity, including manufacturing.

He said direct tax collection was up 12.01 per cent at Rs 5.53 lakh crore in April-December 2016, compared to revenue in the year-ago period, while indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore.

Giving the break-up, he said excise collection was up 43 per cent at Rs 2.79 lakh crore, while service tax rose 23.9 per cent to Rs 1.83 lakh crore in the first nine months of the current fiscal. Customs duty receipts were up 4.1 per cent at Rs 1.67 lakh crore.

Indirect tax collection in December was up 14.2 per cent year-on-year.

During the month, which witnessed the demonetisation process, the excise collection was up 31.6 per cent, Mr. Jaitley said, adding that this category was directly linked to manufacturing.

Service tax receipts in December were also up 12.4 per cent. Customs revenue dipped 6.3 per cent as gold imports came down.

“Tax collection data is real and not an estimation,” Mr. Jaitley said, while dismissing apprehensions of a slowdown following currency squeeze post demonetisation.

When compared with tax collections in November, indirect tax receipts in December 2016 were up 12.8 per cent, he said.

“Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,” he said.

VAT collections in most States too had shown an increase and they also received taxes in the old currency in November.

“In my opinion, all well administered States have seen rise in VAT collection even in November,” he said

Highlights

The April-December 2016 direct tax collection went up 12.01 per cent.

Indirect tax collection in April-December 2016 up 25 per cent.

Excise collection up 43 per cent, service tax 23.9 per cent, customs duty increases 4.1 per cent

In December, customs collections dipped 6.1 per cent as gold imports came down; Excise, which is linked to manufacturing, increased 31.6 per cent, service tax up per cent

Indirect tax collection in December 2016 up 14.2 per cent

Compared to Nov 2016, indirect tax collection growth in December 2016 is 12.8 per cent

State VAT collection up; all well administered states have seen rise in VAT collection even in November

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Printable version | Dec 5, 2020 3:51:42 PM | https://www.thehindu.com/business/Economy/Tax-collections-up-demonetisation-has-not-hit-economy-Jaitley/article17012825.ece1

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