According to Finance Minister Nirmala Sitharaman, the government’s net tax revenues grew 5 percent in the fiscal year ended March 31, 2021. The net tax (i.e., the sum of direct and indirect taxes) revenue in 2020-21 was over Rs 14.24 lakh crore. Thus, a nearly 5 percent growth from Rs 13.56 lakh crore in the previous financial year.
Sitharaman said in a written reply to the Lok Sabha, the government has taken many steps to boost both direct and indirect tax revenue collection. The government has taken many steps including curbing tax evasion, promoting voluntary compliance, reducing litigation, widening/deepening the tax base, and promoting digital transactions.
However, non-tax revenue collection observes a dip of 36 percent. Reportedly at Rs 2.08 lakh crore in 2020-21 from over Rs 3.27 lakh crore in 2019-20.
The government’s net revenue (tax+non-tax) collection in the last financial year declined 3.09 percent to Rs 16.32 lakh crore.
Cess and Surcharge (Net Tax) collection
While replying to a separate question, Minister of State for Finance Pankaj Chaudhary said, the total cess and surcharge collection under indirect taxes (GST+non-GST) increased. With an increment of 53 percent to over Rs 4.39 lakh crore in 2020-21 from the previous year.
The cess collection in 2018-19 under indirect taxes, was Rs 2.67 lakh crore. Moreover, in 2017-18 the cess collection under indirect taxes was Rs 2.17 lakh crore.
Shri Pankaj Chaudhary said that the States’ share of central taxes and duties are determined after deducting cesses and surcharges; apart from the cost of collection of the respective tax. The cesses form part of the Consolidated Fund of India. The funds are used for the purpose for which they are levied. In many cases, it involves grants given to states.
While giving an example he added, the entire GST compensation cess is levied to provide compensation to states for loss of revenue due to the introduction of GST. Similarly, 100 percent of Prarambhik Shiksha Kosh and a substantial portion of the Central Road are given to states as grants for respective purposes. Other such grants are; Infrastructure Fund, Pradhan Mantri Swasthya Suraksha Nidhi and Madhyamik, and Uchchtar Shiksha Kosh.
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