Business

Customs, excise fuel indirect tax surge in COVID-hit year

Revenue rebound: GST collections exceeded ₹1 lakh cr.in each of the last 6 months of FY21, the Ministry said. Nagara Gopal  

A jump in excise revenue helped lift net indirect tax collections by 12.3% in FY21 to ₹10.71 lakh crore, surpassing the Centre’s recently revised estimates, provisional data from the Finance Ministry showed on Tuesday.

Goods and Services tax (GST) collections for the full year fell 8% from ₹5.99 lakh crore in FY20 to ₹5.48 lakh crore, but the overall kitty was bolstered by a sharp spike in excise collections.

“Net tax collections on account of Central Excise and Service Tax (Arrears) during financial year 2020-21 stood at ₹3.91 lakh crore as compared to ₹2.45 lakh crore in the previous financial year, thereby registering a growth of more than 59%,” the Ministry said in a statement. Customs duty collections also grew 21% to ₹1.32 lakh crore, helping swell the exchequer’s coffers.

“The 59% growth in net central excise and service tax (arrears) collections is largely on account of the Sabka Vishwas scheme for resolving legacy disputes,” said Saket Patawari, executive director at financial consultancy Nexdigm. “In addition, there has been a rise in customs duty collection,” he added. Net direct tax collections for the pandemic-hit FY21 grew almost 5% to ₹9.45 lakh crore, provisional data showed last week.

Subject to reconciliation

Both the direct and indirect tax numbers are subject to reconciliation.

“GST collections were severely affected in the first half of the financial year on account of COVID,” the Ministry said. “However, in the second half, GST collections registered a good growth and collections exceeded ₹1 lakh crore in each of the last six months,” it added.

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Printable version | May 6, 2021 12:59:32 PM | https://www.thehindu.com/business/customs-excise-fuel-indirect-tax-surge-in-covid-hit-year/article34313533.ece

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