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Tax Revenues in 2021-22 exceed the Union Budget estimates by ₹5 lakh crore

Newdelhi:9/4/22:The tax revenue in the Union Budget for 2021-22 was estimated at ₹22.17 lakh crore against the revised estimates of ₹19 lakh crore, with a growth of 17%. The Union Budget was presented on 1st February 2021 when the 1st COVID wave had tapered off in India but the world was facing successive waves.

Against the Union Budget estimates of ₹22.17 lakh crore, the revenue collections as per the pre-actual figures are ₹27.07 lakh crore, almost ₹5 lakh crore above the budget estimates. This is a growth of 34% over last year’s revenue collection of ₹ 20.27 lakh crore, led by a growth of 49% indirect taxes and supported by a 20% growth in indirect taxes. This revenue growth has been propelled by rapid economic recovery after successive waves of COVID, supported by one of the largest immunization programmes in the world run by the Government. It also signifies a robust recovery in the economy. These were 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 the use of technology and artificial intelligence.

2021-22 marks the highest tax-GDP ratio of 11.7%, with direct tax to GDP ratio at 6.1% and indirect tax to GDP ratio at 5.6%. 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. The ratio of direct to indirect taxes recovered from 0.9 in 2020-21 back to 1.1 in 2021-22.

The gross corporate taxes during 2021-22 was ₹8.6 lakh crore against ₹6.5 lakh crore last year, which shows that the new simplified tax regime with low rates and no exemptions has lived up to its promise. During the year, the Income-tax department gave refunds of ₹2.24 lakh core. During the last two years, the effort has been to clear the backlog of refunds to infuse liquidity into the hands of businesses. During the year, 2.4 crore refunds were issued including 2.01 crore related to the year 2021-22, for which the returns were filed till 31st March 2021.

This has been possible due to the faster processing of returns. During 2021-22, 22.4% of returns were processed on the same day and around 75% of returns were processed in less than a month. 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 crores last year.

On the indirect taxes, GST has seen an exemplary growth from 2021-to 22 despite two waves of the COVID-19 pandemic. CGST revenues increased from ₹4.6 lakh crore last year to ₹5.9 lakh crore in 2021-22. The average monthly gross GST revenue in 2021-22 was ₹1.23 lakh crore as compared to ₹94,734 in 2020-21 and ₹1.01 lakh crore in 2019-20.

This again signifies a robust rebound in the economy. This has been complemented due to various measures taken to improve compliance. The GSTR-3B filing (percentage of returns of the previous month filed till the end of the month) improved from 74% in September 2020 to 87% in February 2022. The GSTR-1 filing has significantly improved from 54% in September 2020 to 82% in February 2022. This also shows that the gap between GSTR-3B filing and GSTR-1 filing has completely narrowed down to the level of elimination. This shows that the GST ecosystem has appreciated the invoice-based discipline in GST, which not only benefits GST revenues but also contributes to the overall formalization of the economy.

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

During 2021-22, Customs duty has witnessed a growth rate of 48%. During the last two years, the Government has undertaken a comprehensive review and rationalization of the Customs tariff structure through extensive consultations and crowdsourcing and has rationalized various exemptions and simplified the tariff structure.

It is expected that the trend of recovery in the economy and tax revenues of the Government will continue to grow.

About Editor in chief

Ashok Palit has completed his graduation from Upendranath College Soro, Balasore and post graduation from Utkal University in Odia Language and literture.. He has also carved out a niche for himself as a scribe of eminence after joining the profession in 1988. He is also an independent media production professional. He brings loads of experience to Advanced Media, Ashok Palit as a cineaste has been active in film criticism for over three decades. As a film society activist, he soared to eminence for his profound commitment to the art film appreciation and aesthetics of cinema. His mode of discourse is often erudite but always lucid and comprehensible marked by a perfect acumen so rare in the field. A film aesthete with an immense fond of critical sensibilities, he wrote about growth and development of odia cinema in New Indian Express, The Times of India, The Hindustan Times, The Asian Age and Screen. He has been working as an Editor for Cine Samaya from 2002-2004.. He had made solid contribution on cinema in many odia Dailies and weekly such as Samaj, Prajatantra, Dharatri, Samaya, Satabadi, and weekly Samaya.
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