Centre's tax collections will exceed budget estimates, says Jaitley
05 January 2017
The centre is hopeful of exceeding its budget estimates (BE) for 2016-17 in both direct and indirect tax collections while some states have complained of declining tax revenues following the centre's demonetisation drive.
Finance minister Arun Jaitley on Wednesday also reiterated the decision to advance the budget presentation date to 1 February 1, despite objections by state governments.
''We will end this year with higher revenues for both direct and indirect taxes compared to the estimates,'' Jaitley said after the Goods and Services Tax Council meeting and pre-budget consultation with state counterparts.
States, however, raised concern over declining revenues and sought relaxation in the Fiscal Responsibility and Budget Management (FRBM) norms, beside central support to revive labour-intensive industries.
However, the centre's indirect tax collections, which include central excise, service tax, customs, were up 26.2 per cent in the April-November period at Rs5,52,000 crore – just over the full year's target of 10,80,000 crore.
Excise duty collections rose 43.5 per cent in the April-November 2016-17 period to Rs2,43,000 crore, against the budget estimates of 12.15% rise. Service tax collections increased 25.7 per cent to Rs1,60,000 crore in the April-November 2016-17 period, against the 10 per cent projected in the BE.
Customs duty collections rose 5.6 per cent to Rs1,48,000 crore in the first eight months – lower than the projected budget estimate of 9.78 per cent growth in FY17.
Net addition to the direct tax kitty till 19 December is estimated to be higher by 13.6 per cent after factoring in refunds - higher than the budget target of 12.5 per cent. Corporate tax collection increased by 8.75 per cent during the period against the budget estimate of a 9.04 per cent increase for the full year. Personal income tax collections rose 23.9 per cent till 19 December, against the budget estimate of a 18.1 per cent increase.
Most states have sought relaxation in FRBM legal limits. Jharkhand and Andhra Pradesh wanted a one percentage point increase from the current year's fiscal deficit limit of three per cent of gross state domestic product.
Delhi finance minister Manish Sisodia said his revenue fell 24 per cent last month. However, Haryana said tax revenues remained steady, "the same as last year, rather better.
Asked about opposition parties' demand for postponing of budget presentation date due to the coming state elections, Jaitley said, "This is not a tradition every time. Immediately before the Lok Sabha elections, an interim Budget is presented. This is a constitutional necessity."
Also, Jaitley pointed out, "They (the opposition) say the popularity of demonetisation is very low. Then, why are they worried about the Budget?"
He said the reason behind advancing the presentation date is more technical and is intended to ensure that actual expenditure starts on 1 April, when the financial year begins.
Meanwhile, Chief Election Commissioner Nasim Zaidi on Wednesday said various political parties had represented on the 1 February presentation of the union budget, while the poll campaign was still on in five states. "The Commission is examining this representation," he told reporters.
On relaxation in cash withdrawal limits, Jaitley said the Reserve Bank of India (RBI) would decide on it after assessing the situation. He also ruled out a relaxation in rules on depositing junked notes in select central bank branches.
"Actions are taken in phases and so are relaxations," he said on when the cash withdrawal restrictions could be ended.