Gross tax revenue for 2018-19 is estimated to decrease by Rs 23,067 crore, primarily dragged down by a Rs 1 lakh crore shortfall in Goods and Services Tax (GST) collections on the indirect tax front, even as direct tax collections are set to exceed the budget target by Rs 50,000 crore, Union Budget presented for the next financial year on Friday showed. For 2019-20, direct tax revenues are estimated to grow 15 per cent to Rs 13.80 lakh crore, while indirect taxes are estimated to rise 11.8 per cent to Rs 11.66 lakh crore.
GST collections have fallen short of the budget target by Rs 1 lakh crore, with revised estimate for 2018-19 pegged at Rs 6.44 lakh crore as against the Budget target of Rs 7.44 lakh crore. Revenue from direct taxes, however, are estimated to exceed the initial budget target by Rs 50,000 crore to Rs 12 lakh crore in 2018-19.
For 2019-20, out of the Rs 13.80 lakh crore direct taxes, the government has estimated to raise Rs 7.60 lakh crore from corporate tax and Rs 6.20 lakh crore from income tax, higher than Rs 6.71 lakh crore and Rs 5.29 lakh crore, respectively, in the current fiscal. Other indirect taxes apart from GST fared better in 2018-19, with customs revenue mop-up estimated to be higher than the Budget estimate by Rs 17,538 crore at 1.30 lakh crore. Service tax revenue was accounted to be zero in 2018-19, while in the revised estimates it has been pegged at Rs 9,283 crore. Excise mop-up is estimated broadly at the same level as at 2.59 lakh crore in 2018-19. For 2019-20, out of total estimated Rs 11.66 lakh crore indirect taxes, GST revenue has been pegged at Rs 7.61 lakh crore. The government has also put a conservative estimate for excise at Rs 2.59 lakh crore for 2019-20, but has scaled up customs revenue estimate by 11.8 per cent to Rs 1.45 lakh crore.
So far, in the 10 months (April-January) of the current fiscal, total GST collections by the Centre and states stood at over Rs 9.71 lakh crore. For the full fiscal 2018-19, the GST collection target of the Centre and states was Rs 13.48 lakh crore.
Finance Minister Piyush Goyal, while presenting the interim Budget for 2019-20, said in spite of major rate reductions and relaxations, revenue trends for GST are encouraging. “The average monthly tax collection in the current year is Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year,” Goyal said. The state revenues are improving with guaranteed 14 per cent annual revenue increase for the first five years of the implementation of GST, he said.
The government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a group of ministers to examine and make recommendations in this regard at the earliest, he added. Goyal further said that the GST rate has been continuously reduced, providing relief of about Rs 80,000 crore annually to consumers.
Shortfall in GST revenues was also cited as one of the reasons for the deviation in the path of fiscal deficit in the Budget documents along with the agricultural situation in the country. “Accrual of the full benefit of GST reforms and revenues is expected to take some more time and therefore the stabilisation phase is expected to continue in 2019-20 too. Further, full fiscal impact of income support scheme for farmers will also be felt in FY 2019-20. Therefore fiscal deficit is estimated to remain at 3.4 per cent of GDP in 2019-20 too,” the Budget documents stated.
Goyal also said that anti-black money measures including demonetisation have brought undisclosed income of about Rs 1.30 lakh crore to tax, Goyal said, adding that the government is committed to eliminating the ills of black money. “Anti-black money measures taken by us during the last four-and-half years in the form of black money law, Fugitive Criminal Offenders Act, and demonetisation, have brought undisclosed income of about Rs 1,30,000 crore to tax, and led to seizure and attachment of assets worth Rs 50,000 crore,” he said.
The minister said that during this period, benami assets worth Rs 6,900 crore and foreign assets worth Rs 1,600 crore were attached. As many as 3,38,000 shell companies have been detected and de-registered, and their directors disqualified. he added.