Tax collections improve in FY22 on low base effect

CORPORATE TAX COLLECTIONS REGISTERED OVER 90% GROWTH DURING APRIL TO NOVEMBER 2021

NEW DELHI: Corporate tax collection which was severely impacted in FY22 due to the Covid-19 pandemic, has jumped 85% in the current financial year from a low base, alongside big improvements in income tax and GST takings.

The Economic Survey for the fiscal year 2022 tabled in Parliament on Monday showed that the government collected ₹3.5 lakh crore in corporate taxes during April-November FY22, compared with ₹1.9 lakh crore in the corresponding period of FY21.

In April-November FY20, the last pre-pandemic tax year, corporate tax collection stood at ₹2.9 lakh crore.

“During the current fiscal year, the corporate tax collections have been buoyant, registering an above 90% growth during April to November 2021 over April to November 2020,” it said.

Collection of personal income tax grew 47.2% in AprilNovember FY21 and 29.2% in April-November FY20. During April-November FY22, the government collected income tax worth ₹3.5 lakh crore, compared with ₹2.4 lakh crore in the year ago period.

Takings of the goods and services tax (GST) were also robust in the current financial year, backed by stricter enforcement, a nationwide drive against evaders and an improvement in business activity.

The survey noted that after falling during the nationwide lockdown in 2020-21 and regional restrictions during the second Covid-19 wave, there was quick recovery in monthly GST collections.

The impact of the second wave on GST collections was more muted than the nationwide lockdown during the first wave.

It noted that over the last four years, GST revenue has steadily grown, with average monthly collection increasing from ₹90,000 crore in 2017-18 to ₹1.19 lakh crore in 2021-22 (up to December).

“The improvement in GST collections has been due to the combined effect of the rapid economic recovery post pandemic, the nation-wide drive against GST evaders and fake bills along with many systemic changes introduced recently, and various rate rationalization measures undertaken by the GST Council to correct inverted duty structure,” the Economic Survey said.

Revenue receipts of the central government in AprilNovember 2021 have gone up by 67.2%, as against an estimated growth of 9.6% in the 2021-22 Budget Estimates. Gross monthly GST collections have crossed ₹1 lakh crore consistently since July 2021.

In his address to the joint session of Parliament on Monday, President Ram Nath Kovind desribed the rise in GST collection and the surpassing of the ₹1 lakh crore per month mark as a significant indicator of economic recovery and growth.