FY22 tax collection exceeds budgetary estimate, rises to over Rs 27 lakh cr

New Delhi, April 8 (SocialNews.XYZ) Accelerated economic recovery along with enhanced compliance pushed India's FY22 tax collection to Rs 27.07 lakh crore, almost Rs 5 lakh crore above the Union budget's estimate of Rs 22.17 lakh crore.

Accordingly, the current tax collection grew by 34 per cent over last year's revenue collection of Rs 20.27 lakh crore, led by a growth of 49 per cent in direct taxes and supported by a 20 per cent growth in indirect taxes.

"This revenue growth has been propelled by rapid economic recovery after successive waves of Covid, supported by one of the largest immunisation programme of the world run by the government," the Ministry of Finance said.

"It also signifies a robust recovery in the economy. This was also supplemented with better compliance efforts in taxation. Various efforts were taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence."

Besides, FY22 marked the highest tax-GDP ratio of 11.7 per cent, with direct tax to GDP ratio at 6.1 per cent and indirect tax to GDP ratio at 5.6 per cent.

"The tax buoyancy (which is a measure of growth in tax revenues as compared to GDP growth) is at a very healthy figure of 1.9, with 2.8 for direct taxes and 1.1 for indirect taxes. The ratio of direct to indirect taxes recovered from 0.9 in 2020-21 back to 1.1 in 2021-22."

As per the ministry, the gross corporate taxes during 2021-22 was Rs 8.6 lakh crore against Rs 6.5 lakh crore last year, which shows that the new simplified tax regime with low rates and no exemptions has lived up to its promise. Furthermore, the ministry said that during the year, the income tax department gave refunds of Rs 2.24 lakh core.

"During last two years, the effort has been to clear backlog of refunds to infuse liquidity into the hands of businesses."

"During the year, 2.4 crore refunds were issued that included 2.01 crore related to the year 2021-22, for which the returns were filed till 31st March 2021."

Additionally, this has been possible due to faster processing of returns.

"During 2021-22, 22.4 per cent returns were processed on the same day and around 75 per cent returns were processed in less than a month time. The average processing time for returns during 2021-22 was 26 days. During the year, 7.14 crore returns were filed as compared to 6.97 crore last year."

According to the ministry, on the indirect tax front, GST saw "an exemplary growth during 2021-22 despite two waves of Covid-19 pandemic".

"CGST revenues increased from Rs 4.6 lakh crore last year to Rs 5.9 lakh crore in 2021-22. The average monthly gross GST revenue in 2021-22 was Rs 1.23 lakh crore as compared to Rs 94,734 in 2020-21 and Rs 1.01 lakh crore in 2019-20."

"This again signifies a robust rebound in the economy. This has been complemented due to various measures taken to improve compliance. This shows that the GST ecosystem has appreciated the invoice-based discipline in GST, which not only benefits GST revenues but also contributes to overall formalization in the economy."

Additionally, the ministry said that the level of economic recovery can also be seen from the value of e-way bills generated every month, which has improved from Rs 16.9 lakh crore in January 2021 to Rs 25.7 lakh crore in March 2022.

In addition, during 2021-22, Customs duty has witnessed a growth rate of 48 per cent.

"During the last two years, the government has undertaken comprehensive review and rationalisation of the Customs tariff structure through extensive consultations and crowd sourcing and has rationalised various exemptions and simplified the tariff structure."

"It is expected that the trend of recovery in the economy and tax revenues of the government will continue to grow."

Source: IANS