The corporate tax collections should be viewed over a long term, Department of Economic Affairs Secretary Ajay Seth told FE on Thursday, amid concerns about the FY24 Budget target after a 10% decline in the mop-up witnessed under the largest head of tax revenue in April-July period.
“We should not look at few months’ data and try to find a long-term trend over there. We should (wait ) for another quarter and then reach a conclusion. My sense is that (the BE) will be realised,”the secretary said, on sidelines of the SME Finance Forum event here.
His comments came on the heels of sharp contractions of over 10% in the collections of both corporate tax and excise duties in first four months of FY24. In April-July, the gross tax revenue or GTR (post-refunds mop-up before devolution to states) were at Rs 8.94 trillion, just 2.8% higher than the corresponding period of last year, according to data from the Controller General of Accounts. In order to meet the Budgeted Rs 33.61 trillion figure in 2023-24, which is up 10.1% from the Rs 30.54 trillion collected in 2022-23, gross tax collections will have to rise 12.9% year-on-year in August-March. In August-March 2022-23, GTR had risen by 8.5%.
Economists are also of the view that the Centre could still be able to meet its Budgeted gross tax revenue (GTR) target without any increases in tax rates. They say that stepping up of the tax collection drive, high inflation and robust consumption will help meet the budget estimate (BE) of GTR.
Separately, Seth also said that the Centre would try to introduce the Unified Securities Market Code in Winter Session of Parliament. “This (the Code) is reaching the final stages, and we hope that in the winter session it can be brought before Parliament but there is still some work that needs to be done,” he said.
Finance Minister Nirmala Sitharaman had in 2021 said that the Centre will issue a unified market code. The securities market code will include the Sebi Act, Depositories Act and Government Securities Act, and market regulator Securities and Exchange Board of India (Sebi), will be notified as regulator for a gold exchange.