Robust growth in receipts from customs duty and central excise—mostly from auto fuel, has helped the central government to report a 12 per cent jump in FY21 net indirect tax revenue to Rs 10.7 trillion compared to the receipts in the year-ago period. The Centre has surpassed both the original as well as upwardly revised estimates for FY21 in the case of customs duty as well as central excise and service tax have taken together, shows official data released on Tuesday by the finance ministry.
In the case of goods and service taxes (GST), FY21 collection is lower than the original estimate made before the pandemic unfolded, but is an improvement over the downward revision made two months ago.
The Centre collected Rs 1.32 trillion in customs duty receipts in FY21, an increase of 21 per cent from the collections made in the year before.
The bulk of the Rs 3.91 trillion collected in FY21 in excise and service tax together is from excise duty on items such as petrol and diesel that are outside GST. The ministry did not give the break-up of central excise and service tax but the arrears on account of service tax, a levy that got subsumed into GST, is a small amount. It was in the range of Rs 1,400 crores, going by the revised estimates given in the union budget for FY22.
The Union government collected Rs 5.48 trillion in FY21 in central GST, integrated GST levied on inter-state sales that are settled between the Centre and state, and GST cess which is used to compensate states. This shows an 8.5 per cent contraction from what was collected in the year before but is a 6.4 per cent improvement over the revised estimate of Rs 5.15 trillion. The improvement over the revised estimate also shows the sharp recovery in GST collections.
One factor that contributed to the recovery in GST receipts especially in the second half of the fiscal is the recovery in economic activities after the national lockdown in the initial months was lifted. The strong anti-evasion drive and the campaign against entities dealing in fake invoices also helped in boosting GST revenue. This has resulted in GST receipts of the union and state governments in March reaching an all-time high of Rs 1.24 trillion in March.