Budget 2018: The number of individual tax filers rose by an additional 18 lakh or 3% of the existing base, due to the demonetisation exercise and the rolling out of the goods and services tax (GST), the Economic Survey said. However, it added, since these new taxpayers tended to report an average income close to the tax threshold of Rs 2.5 lakh, the revenue impact of the widening of the tax base could remain muted in the initial phase. Allaying concerns over GST revenue, the survey said given the collections in the first five months of the new tax (July-November), the combined GST-pre-GST revenue for the Centre and states, on an annualised and notional steady-state basis, could have been Rs 10.9 lakh crore in 2017-18, up 12% from 2016-17 base of Rs 9.7 lakh crore, except for transitional issues. That reflects a buoyancy of 1.14, much above historical indirect tax buoyancy of 0.9.
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On the indirect tax front, the survey said the taxpayer base grew by more than 50% since GST was rolled out in July last year. The combined tax base in the pre-GST regime for the relevant taxes was 64 lakh (after weeding out multiple registrations under excise, service and VAT systems). This has jumped to 98 lakh under the new indirect tax system, the survey said. (The GST taxpayer base recently crossed 1 crore.)
From about 2% of GDP between 2013-14 and 2015-16, personal income tax collections are likely to rise to 2.3% of GDP in 2017-18, a historic high, the survey noted. “The sum of all government efforts (demonetisation, GST and income disclosure schemes) increased income tax collections, thus far, between Rs 65,000-90,000 crore. These numbers imply a substantial increase in reported incomes of about 1.5-2.3% of GDP,” the survey said.