Budget 2019 India: The gross tax to GDP ratio is projected to decline to 11.7 per cent in the current financial year compared with the revised figure of 11.9 per cent for the last fiscal.
Union Budget 2019 India: The Union government’s gross tax revenue is projected to grow 9.5% in the current financial year to Rs 24.6 lakh crore. As there is a question mark over the official GDP numbers, the tax targets set by the Budget could be difficult to achieve despite the best efforts by an enthusiastic tax administration. There was a revenue shortfall of Rs 1.7 lakh crore in 2018-19, according to the estimates of the controller general of accounts.
The gross tax to GDP ratio is projected to decline to 11.7 per cent in the current financial year compared with the revised figure of 11.9 per cent for the last fiscal. The growth in tax revenue is offset by an expected 12 per cent growth in the county’s nominal GDP to Rs 211 lakh crore. There has been a marked increase in the tax to GDP ratio in the last six years.
While the corporation tax mop-up is expected to register a 14 per cent growth to Rs 7.7 lakh crore this fiscal compared with the previous year’s revised estimates, personal income tax collection is expected to grow 7.6 per cent over the last year’s number. The Union government’s share in GST collection is expected to grow 3% in the current financial year to Rs 6.6 lakh crore.
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The central government’s net tax revenue is projected to shoot up to Rs 16.5 lakh crore in the current financial year from Rs 9.8 lakh crore in 2014-15. An increase of 68 per cent over the last six years is certain to raise some questions.
There was a 10.9 per cent fall in the gross tax-to-GDP ratio in 2018-19 due to a 16% fall in indirect tax revenues. While direct taxes grew by 13.4 per cent in the year on the back of robust corporate tax collections, indirect tax mop-up was affected by a shortfall in GST collections. The Budget presented by Arun Jaitley on February 1, 2018 had projected an inflow of Rs 11.5 lakh crore from direct taxes and Rs 7.43 lakh crore from GST in 2018-19.