Finance Minister Arun Jaitley on Monday dismissed slowdown concerns post demonetisation as “anecdotal” and said that indirect tax collection grew at a decent 14.2 per cent in December buoyed mainly by excise, reflecting an uptick in manufacturing.
December, which witnessed currency crunch following the ban on high value notes, saw excise collections grow at 31.6 per cent, while service tax was up by 12.4 per cent. Customs mop up, however, witnessed 6.3 per cent decline mainly on account of dip in gold imports.
For the April-December period of the current fiscal, indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore, which is about 81 per cent of the Budget estimates. Direct tax collection was also up 12.01 per cent at Rs 5.53 lakh crore, 65 per cent of Budget estimates.
After the shock demonetisation of Rs 500 and Rs 1,000 notes on November 8+ , critics have voiced concerns of slowdown in industrial activity.
Mop up from excise duty — a reflection on manufacturing activity — registered a hefty 43 per cent growth in the nine month period to December.
Asked about reports of job losses post demonetisation, Jaitley said: “All these stories and reports are anecdotal. The growth figure does not depend on anecdotal basis … Statistics and taxation figures are real. This is the money which has come in.”
Excise collection in December grew 31.6 per cent to about Rs 36,000 crore. Service Tax realisation grew 12.4 per cent to Rs 23,000 crore.
Collection of indirect taxes, which comprise excise, service tax and customs, was up 14.2 per cent to about Rs 76,000 crore last month.
Jaitley said the data showed that during the 9-month period while direct tax collection has moved up, indirect tax collection moved up significantly.
Tax collection in December 2016 has also moved up compared to December 2015 and November 2015.
When compared with tax collections in November, indirect tax receipts last month were up 12.8 per cent, he said.
“Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,” Jaitley said.
Jaitley said VAT collections in most states have shown an increase and they also received taxes in the old currency in November. “In my opinion, all well administered states have seen rise in VAT collection even in November.”
Giving the break-up, he said excise collection was up 43 per cent at Rs 2.79 lakh crore, while service tax rose 23.9 per cent to Rs 1.83 lakh crore in the first nine months of the current fiscal. Customs duty receipts were up 4.1 per cent at Rs 1.67 lakh crore.
Asked about divergence in the GDP number and tax collection figures, Jaitley said: “We will only comment on final figures (of GDP). Today we only have advance estimates presumption. Tax collection data are real it is not a presumption.”
The Advance Estimates of GDP released by CSO last week showed economic growth plunged to a 3-year low of 7.1 per cent in 2016-17, from 7.6 per cent last financial year. However, the data does not take into account the impact on industrial activity post demonetisation.
“Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,” he said.
As regards the growth rates for Corporate Income Tax and Personal Income Tax in terms of gross revenue collections, the growth rate under CIT is 10.7 per cent while that under PIT is 21.7 per cent.
However, after adjusting for refunds, the net growth in CIT collections is 4.4 per cent while that in PIT collections is 24.6 per cent.
Refunds amounting to Rs 1.26 lakh crore have been issued during April-December 2016, which is 30.5 per cent higher than the refunds issued during the corresponding period last year.
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After accounting for the third instalment of advance tax received in December, 2016, the collections under advance tax stand at Rs 2.82 lakh crore, up 14.4 per cent over the year-ago figures.
source : cainindia.org