Indian Economy: There was a big jump in tax collection in the 2022-23 financial year. Whether direct tax or indirect tax, there has been an increase in the collection of both. If the income of the business sector has increased, then they pay more taxes, then the collection of GST has also increased. At the same time, personal income tax is booming.
On Sunday, October 9, the Ministry of Finance released the data on direct tax collection, according to which there was a 24% jump in the collection of direct taxes and from April 1, 2022 to October 8, there was Rs 8.98 lakh crore. In which the collection of corporation tax increased by 16.74% and that of personal income tax by 32.30%. Excluding refunds, collection of direct taxes was Rs 7.45 lakh crore. This represents 16.3% more than the corresponding period of the previous year. GST collection in September 2022 was Rs 1,47,686 crore. Over the past six months, the continuous collection of GST has been over Rs 1.4 lakh crore.
Tax collection has increased but so have the challenges!
The tax collection data of any country acts as an indicator of the economic activity of that country. But the pace of industrial production in India is slowing. The IIP rate is down. The July IIP was 2.4 percent. There is also a decline in exports. The trade deficit doubled in the first six months. The core sector was at a nine-month low of 9.9%, despite the recovery in its tax receipts.
The pace of development slowed down!
On September 30, 2022, the RBI reduced the GDP estimate for the current financial year from 7.2% to 7%. Many rating agencies, including the World Bank, have also reduced the growth rate estimate. On the one hand, rating agencies, including the Central Bank, are reducing growth rate estimates for the next fiscal year in addition to the current fiscal year, but tax revenues are increasing.
Businesses – ordinary people unhappy with inflation
Commodity prices soar after Russia’s attack on Ukraine. Crude oil prices relative to natural gas and edible oil rose. Thus, the business world is troubled by the rising prices of iron ore and other raw materials. Because the burden of cost increase is passed on to customers. What affects sales. On the other hand, the rupee is depreciating against the dollar. All these reasons exert pressure on inflation. People’s savings are shrinking because of the cost of loans. Because EMI is getting expensive. Despite all these troubles, tax collection has increased. It is believed that due to the increase in corporate income, their tax liability has increased, and then personal income tax collection has increased due to AIS (Annual Information System). Tax revenues have increased due to the close monitoring of taxpayers’ annual financial transactions. But if the pace of development continues to slow down like this, there may be a drag on the pace of tax collection, which may increase government problems.
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