I The central government’s direct tax collections increased 15.1 per cent in April-November 2016 compared with the same period a year earlier, while indirect tax collections rose 26.2 per cent in the same eight-month period.

Net direct tax collections amounted to Rs.4.12 lakh crore as of November 2016, which is 48.7 per cent of the Budget Estimates of direct taxes for the entire financial year.

Net indirect tax collections aggregated to Rs.5.52 lakh crore as of November 2016, which is 71.1 per cent of the Budget Estimates for the year.

However, total indirect tax receipts during November 2016 were 13.9 per cent lower than the collections seen in October 2016.

Tax experts said the decline in indirect tax receipts last month was most likely unrelated to the government’s November 8 decision to withdraw high value currency notes since any such impact would only be felt with a lag.

A shortage of cash resulting from the withdrawal of about 86 per cent of the total currency notes in circulation has slowed economic activity across sectors. The Reserve Bank of India on December 7 cut its gross value-added growth forecast for the fiscal year 2016-17 by 50 basis points to 7.1 per cent, from 7.6 per cent.
{as
“If demonetisation happens on November 9, people cannot stop production from November 9 and 10,” M.S. Mani, Senior Director at Deloitte India, said in a telephone interview.

“Whatever is there in the cycle, all the raw materials have to get consumed. Goods will get produced and will get dispatched,” he said.

“If there is excess stock on account of demonetisation, that will lead to a reduction in production with a two-month delay,” Mr. Mani added. “So the November effect, to my mind, will be felt in January.”

Within direct taxes, net corporate income tax collections grew 8.75 per cent during April-November 2016 while net personal income tax collections grew 23.9 per cent over the same period of the previous year.

“Refunds amounting to Rs.1,05,561 crore have been issued during April-November 2016, which is 17.35 per cent higher than the refunds issued during the corresponding period last year,” the government said in a statement.

Indirect tax collections grew 26.2 per cent in April-November 2016 when taking into account the additional revenue measures (ARM) taken by the government, such as the increase in excise duty on petrol, diesel and tobacco.

Stripping out the receipts from those measures, indirect tax collections grew at a lower rate of 8 per cent in the period.

Within indirect taxes, net central excise collections stood at Rs.2.43 lakh crore in the period between April and November 2016 as compared with Rs.1.69 lakh crore during the corresponding period in the previous financial year, a growth of 43.5 per cent.

Net service tax collections during the April-November period, at Rs.1.60 lakh crore, grew by 25.7 per cent.

Net customs duty collections grew 5.6 per cent in the April-November period.