Indirect tax collections rose by 23.1% in November, despite demonetisation
Finance Ministry data said direct tax collections increased by 15.12% in the April-November period.
Indirect tax collections surged by 23.1% in November year on year, the Finance Ministry said on Friday. Net indirect tax collection in the month, however, declined by 13.9% from that in October, when it had increased to increased to Rs 58,691.
A statement from the ministry said direct tax collections rose by 15.12%, with net collections at Rs. 4.12 lakh crore in April-November. In this period, the government gathered 26.2% more indirect tax, amounting to Rs 5.52 lakh crore. The data also indicated that growth in net indirect taxes was 8% in the April-November period.
The growth rate in net collection for customs, central excise and service tax was 16.1%, 33.7% and 15.5% higher in November than in the corresponding period last year. The Centre’s corporate tax collection also increased by 8.75%, while personal income tax rose by 23.9%. Refunds soared by 17.35% from that last year to Rs 1.05 lakh crore in April-November 2016.
The government collects indirect tax from intermediaries like manufacturers and retailers, whereas direct tax is paid directly to the government body.While the figures indicate that the Centre’s demonetisation drive had a minimum impact on the tax collections, some analysts believe its effects will be felt in January, according to reports.
The move to scrap Rs 500 and Rs 1,000 notes, which made up about 86% of the total currency notes in circulation, has slowed economic activity across sectors. The demonetisation decision was announced as part of the Centre’s efforts to fight corruption and black money.