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Informist, Friday, Feb. 28, 2025

--Govt Apr-Jan gross tax revenue INR 29.844 tln vs INR 27.062 tln year ago 

--Govt: Apr-Jan tax devolution to states INR 10.74 tln vs INR 8.20 tln yr ago 

--Govt Jan gross tax revenue INR 2.340 tln vs INR 2.237 tln year ago 

NEW DELHI – The government's gross tax mop-up in January rose only 4.6% to INR 2.340 trillion as devolution to states during the month surged 137.1% on year. In January, the Centre had devolved double instalment to states to the tune of more than INR 1.730 trillion, taking the total for Apr-Jan to INR 10.741 trillion, which is 31% more than what was transferred in the first ten months of 2023-24 (Apr-Mar).

States, which usually get tax devolution from the Centre in 14 equal instalments every year, have already seen three months of double instalments in FY25 and have received 83.5% of the full-year devolution in Apr-Jan.

Owing to the higher devolution to states, the government's net taxes collections during January fell sharply by 60% on year to INR 605.05 billion. For the very same reason, the government's net tax collections for the first ten months of the year was up only 1.3% at INR 19.036 trillion. 

On gross basis, in the first ten months of the financial year FY25, the government's tax collection was up 10.3% year on year at INR 29.844 trillion as income tax collections continued to be the top contributor to the Centre's coffers, data released Friday by the Controller General of Accounts showed.

In January, income tax collections grew 19.7% to INR 749.75 billion, taking the total for Apr-Jan to INR 9.128 trillion, or 22% higher over last year. On other hand, corporate tax collections in January fell sharply by 69.3%, taking the total collection under this head for Apr-Jan to INR 7.513 trillion, down 0.6% on year. Corporate tax collections were trailing for a while but had risen in December. 

As per the revised estimates, the government expects to collect gross tax revenue of INR 38.535 trillion in FY25, which would be 11.2% higher than FY24. The revised growth in income tax and corporate tax collections is 20.3% and 7.6%, respectively. For the target to be met, the government has to collect corporate tax to the tune of INR 1.143 trillion and income tax collections to the tune of INR 1.721 trillion in each of the last two months.

As such, on a month-on-month basis, January collections were lower owing to advanced tax payments in December. Advance tax is filed by individuals and corporates in four instalments, in the middle of June, September, December and March. 

On the indirect tax front, January saw a moderate growth in central goods and services tax, steady rise in customs and a fall in excise mop-up. For Apr-Jan, central GST was up 11.3%, while customs were up 8.6%. Excise collections in Apr-Jan were marginally down 1.3% from the same period last year.

While the overall gross tax figure may meet Budget expectations, the gvernment's net tax revenue may miss the revised aim of INR 25.57 trillion.  

The details for the central government's tax collections for January and Apr-Jan are as follows (in billion INR):

End

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

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