Thanks to robust Goods and Service Tax (GST) collections and improvement in customs duty collections, the Centre’s indirect tax receipts, before devolution to states, have increased by around 19% on-year in April-May as against the required rate of 10.6% to achieve the FY24 target.
The indirect tax revenue target for FY24 is set at Rs 15.37 trillion, against the actual receipts of Rs 13.91 trillion in FY23. In April-May of FY24, the indirect tax receipts are estimated to be around Rs 2.46 trillion or 16% of the annual target compared with 14.8% of the relevant target achieved in the year-ago period. “The indirect tax receipts in April-May are in line with the budget estimate for FY24,” a senior official told FE, adding that the annual target would be met comfortably.
In the previous financial year, the Centre achieved the revised estimate of Rs 13.9 trillion, which was Rs 50,000 crore more than the budget estimate (BE), largely aided by buoyant GST receipts.
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The average monthly GST collections in the first two months of the current financial year have been Rs 1.72 trillion thanks to a whopping Rs 1.87 trillion in April (aided by year-end transactions in March). As expected, the GST collections moderated to Rs 1.57 trillion in May.
As against the requirement of Rs 1.5 trillion monthly gross GST collections (inclusive of state GST and compensation cess), officials expect the monthly collections to range between Rs 1.55-1.6 trillion during the current financial year. This could lead to Central GST collections exceeding the FY24 target of Rs 8.1 trillion by a decent margin.
The official said that Customs duty collections have also fared well in the first two months of the current fiscal compared to the year-ago period.
The focus of the government is on compliance and broadening of the tax base by the Centre in the current financial year to boost revenue collections.
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To check fake GST registrations and input tax credit (ITC) frauds, the Central Board of Indirect Taxes and Customs will assign a risk rating to all applications and tax officers will cross-verify the documents submitted by the applicants with municipal records. The instructions were issued on Wednesday after it came to light during a special drive that fraudsters have misused PAN and Aadhaar numbers of people to obtain GST registrations.
Similarly, the CBIC has been taking steps to reduce the time taken for cargo clearance by the Customs authorities, a move that would help augment customs duty collections.
