Tax revenue to the central government rose 18% to Rs 17.1 trillion in the year ended 31 March, aided by steady growth in direct taxes and a sharp jump in excise and service tax receipts. The robust growth comes despite the economy getting hit by a temporary cash crunch. Central excise duty collection rose 33.9% and service tax collection rose 20.2% in 2016-17 even as the economy slowed to 7.1%. This may be because of better tax compliance in the wake of the government’s crackdown on black money. An official statement from the finance ministry said the total tax receipts in 2016-17 was higher than even the revised estimate of Rs.16.97 trillion made on 1 February. The government collected Rs.8.47 trillion in net direct taxes in the year under review after refunds, which was 14.2% higher than the growth reported a year ago. Net personal income tax collections after refunds grew at 21% and net corporate tax receipts grew at 6.7% in 2016-17 from a year ago. The year also witnessed two rounds of amnesty schemes introduced to let tax evaders come clean on their unaccounted wealth by paying taxes and penalty.

(Live Mint)