A big shortfall in FY19 mop-up has increased the required rate of growth to achieve the Centre’s gross tax target for FY20 to a demanding 22.7% from the estimated 13.5%. The Budget Estimate for gross tax revenue for FY20 is `25.52 lakh crore.
Last year’s collections were just 8.4% higher than the mop-up a year ago.
The gross tax collection for FY19 fell short by `1.68 lakh crore or 7.5% compared with revised estimate (RE)
The collection fell short in FY19 primarily due to large shortfalls in personal income tax (PIT) and goods and services tax (GST) collections. Tax mop-up fell short of target under all categories.
Under direct tax, corporation tax collection was lower by just over `7,000 crore but PIT collection suffered a substantial setback with a deficit against RE of `67,346 crore. Similarly, while collection under customs and excise duty were lower by `12,000 crore and `28,600 crore, respectively, the GST collections were lower by `62,337 crore against the RE level.
The shortfall in actual collections in FY19 will make the BE for the current fiscal even more daunting. For instance, the Centre needs to collect 26% more tax under PIT and 24% more under GST to meet the BE for FY20.