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Informist, Tuesday, Dec. 31, 2024

--Govt Apr-Nov gross tax revenue INR 22.610 tln vs INR 20.420 tln year ago

--Govt: Apr-Nov tax devolution to states INR 8.12 tln vs INR 6.01 tln yr ago

--Govt Nov gross tax revenue INR 2.283 tln vs INR 2.075 tln year ago

NEW DELHI – The government's gross tax mop-up in the first eight months of the financial year 2024-25 (Apr-Mar) was up 10.7% year-on-year at INR 22.610 trillion as income tax collections continued to boost the Centre's coffers, data released Tuesday by the Controller General of Accounts showed. Meanwhile, corporate tax collections were disappointing again, coming in 0.5% lower in Apr-Nov compared to the same period last year.

In November, income tax collections surged 60.9% to INR 743.21 billion, taking the total for Apr-Nov to INR 7.008 trillion, or 23.5% higher over last year. On the other hand, corporate tax collections were down 26.6% last month at INR 237.74 billion.

The government expects to collect gross tax revenue of INR 38.402 trillion in FY25, which would be 10.8% higher from FY24. For corporate and income tax, collections are seen rising 12.0% and 17.4%, respectively. As such, while the Centre is on track to achieve its income tax collection target, the corporate tax mop-up is lagging severely. For both the Budget estimates to be met, income tax collections must post a growth of 9.6% in the final four months of FY25 over the corresponding period of FY24, while the growth in corporate tax collections needs to be a massive 28.2%. Overall, gross tax revenue must rise 11.0% in Dec-Mar to meet the Budget estimate.

While the overall gross tax figure may meet Budget expectations, on a net basis the Centre's tax collections in Apr-Nov were just 0.5% higher from a year ago at INR 14.434 trillion, with November seeing a 3.5% increase to INR 1.385 trillion. The Budget had projected a growth of 11.0% in net tax revenue to INR 25.835 trillion.

The weak growth in the Centre's net tax revenue is due to the robust tax devolution to states, which in November was 22.1% higher at INR 890.87 billion, taking the total for Apr-Nov to INR 8.121 trillion, which is 35.0% more than what was transferred in the first eight months of FY24. The states, which usually get tax devolution from the Centre in 14 equal instalments every year, have already seen two months of double instalments in FY25 and have received 65% of the full-year devolution in Apr-Nov.

On the indirect tax front, November saw robust growth in central goods and services tax and customs, although the excise mop-up was down nearly 8% on year. For Apr-Nov, central GST was up 12.9% against the budgeted growth of 11.0%, while customs was up 8.7%. Excise collections in Apr-Nov, meanwhile, are largely unchanged from the same period last year.

The details for the central government's tax collections for November and Apr-Nov are as follows (all figures except year-on-year change in billion INR):

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Reported by Siddharth Upasani

Edited by Rajeev Pai

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