Finance Minister P Chidambaram has estimated a phenomenal 40 per cent jump in corporate tax collections at Rs 88,436 crore (Rs 884.36 billion) in the current fiscal to project a 24.64 per cent rise in total tax receipts at Rs 317,733 crore (Rs 3177.33 billion).
Among indirect taxes, the 18 per cent increase in excise collections at Rs 109,199 crore (Rs 1091.99 billion) for 2004-05 is mostly because of the hike in duty on steel products from 8 per cent to 12 per cent. Officials said they expected to realise an additional Rs 18,000 crore of direct and indirect tax arrears.
The rise in collections is helped by Rs 3,990 crore (Rs 39.9 of additional service tax that Chidambaram hopes to garner from 14 new services and the proceeds from the 2 per cent education cess on central taxes.
The education cess is expected to raise Rs 4,910 crore (Rs 49.1 billion) for the central government, with direct taxes contributing Rs 2,510 crore (Rs 25.1 billion) out of it.
The finance minister has budgeted for such a hefty rise from tax revenue, as non-tax revenue comprising dividends from public sector banks, interest receipts and other fiscal services is expected to grow only marginally by 2.64 per cent to Rs 36,950 crore (Rs 369.5 billion).
Income tax collection is expected to grow 26.47 per cent to Rs 50,929 crore (Rs 509.29 billion) in 2004-05 from Rs 40,269 crore (Rs 402.69 billion) in the previous fiscal.
In the last fiscal, it slipped from the Budget Estimate by Rs 3,801 crore (Rs 38.01 billion). The education cess will contribute Rs 920 crore (Rs 9.2 billion) to the kitty.
Within indirect taxes, the largest percentage growth in tax collection is estimated from the service tax. The tax is expected to gross Rs 14,150 crore (Rs 141.5 billion), up 70 per cent from Rs 8,300 crore (Rs 83 billion) in revised estimates of 2003-04.
Thanks to the removal of exemptions from countervailing duty, Chidambaram has budgeted for an almost 10 per cent growth in Customs duty in the current fiscal, reversing the flat trend in 2003-04.
Countervailing duty is expected to contribute Rs 3,018 crore (Rs 30.18 billion).