At Rs 27.07 Lakh Crore, Tax Revenues In 2021-22 Exceed Union Budget Estimates By Nearly Rs 5 Lakh Crore

The tax revenue in financial year 2021-22 have exceeded the Union budget estimates by around Rs 5 lakh crore, an official release said on Friday (8 April).

"Against the Union Budget estimates of Rs 22.17 lakh crore, the revenue collections as per the pre-actual figures is Rs 27.07 lakh crore, almost Rs 5 lakh crore above the budget estimates," the Finance Ministry said in a release.

This is a growth of 34 per cent over last years revenue collection of Rs 20.27 lakh crore, led by growth of 49 per cent in direct taxes and supported by 20 per cent growth in indirect taxes, the ministry added.

The tax revenue in the Union Budget for 2021-22 was estimated at Rs 22.17 lakh crore against the revised estimates of Rs 19 lakh crore, with a growth of 17 per cent, according to the ministry.

The Union Budget was presented on 1 February 2021 when the first COVID wave had tapered off in India but the world was facing successive waves.

According to the ministry, the tax revenue growth has been propelled by rapid economic recovery after successive waves of COVID, supported by one of the largest immunisation programme of the world run by the government.

It also signifies a robust recovery in the economy. These was also supplemented with better compliance efforts in taxation. Various efforts were taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence.

Further, FY22 marks the highest tax-GDP ratio of 11.7 per cent, with direct tax to GDP ratio at 6.1 per cent and indirect tax to GDP ratio at 5.6 per cent, the ministry said.

The tax buoyancy (which is a measure of growth in tax revenues as compared to GDP growth) is at a very healthy figure of 1.9, with 2.8 for direct taxes and 1.1 for indirect taxes, according to the ministry.

The ratio of direct to indirect taxes recovered from 0.9 in 2020-21 back to 1.1 in 2021-22, it added.

The gross corporate taxes collected during 2021-22 was Rs 8.6 lakh crore against Rs 6.5 lakh crore last year.

During the year, Income tax department gave refunds of Rs 2.24 lakh core.

The ministry said that during the last two years, the effort has been to clear backlog of refunds to infuse liquidity into the hands of businesses.

"During the year, 2.4 crore refunds were issued that included 2.01 crore related to the year 2021-22, for which the returns were filed till 31 March 2021," it said.

The ministry said that during 2021-22, 22.4 per cent returns were processed on the same day and around 75 per cent returns were processed in less than a month time.

The average processing time for returns during 2021-22 was 26 days.

During the year, 7.14 crore returns were filed as compared to 6.97 crore last year, according to the ministry.

On the indirect taxes, the ministry said that the GST has seen an exemplary growth during 2021-22 despite two waves of COVID-19 pandemic.

"CGST revenues increased from Rs 4.6 lakh crore last year to Rs 5.9 lakh crore in 2021-22. The average monthly gross GST revenue in 2021-22 was Rs 1.23 lakh crore as compared to Rs 94,734 in 2020-21 and Rs 1.01 lakh crore in 2019-20," the ministry said.

The GSTR-3B filing (percentage of returns of previous month filed till end of the month) improved from 74 per cent in September 2020 to 87 per cent in February 2022.

The GSTR-1 filing has significantly improved from 54 per cent in September 2020 to 82 per cent in February 2022, the ministry said.

The level of economic recovery can also be seen from the value of e-way bills generated every month, which has improved from Rs 16.9 lakh crore in January 2021 to Rs 25.7 lakh crore in March 2022, it added.

During 2021-22, Customs duty has witnessed a growth rate of 48 per cent.

The ministry said that it expects that the trend of recovery in the economy and tax revenues of the government will continue to grow.