Economic Survey 2024: GST Collections Drive Indirect Tax Revenue Growth To 10.6% In FY24

Growth in gross tax revenue was estimated to be 13.4% in the fiscal 2023-24, which brings the tax revenue buoyancy to 1.4, according to the 2024 Economic Survey. This growth was led by a 15.8% growth in direct taxes and a 10.6% increase in indirect taxes over the fiscal 2023.

Net tax revenue exceeded budgetary estimates, according to the survey, as net taxes grew by 19.1% in the previous fiscal.

Revenue receipts of the union government consisting of tax revenue and non-tax revenue increased by 14.5% in the previous financial year, it said. Dividends from RBI also pushed the revenue from non-tax receipts higher than estimates.

Cost of collection of direct taxes has reduced from 0.66% of gross collections in 2019-20 to 0.51% in 2022-23, according to the survey.

Direct taxes accounted for 55% of gross tax revenue accrued and the indirect taxes made up the rest of 45%. The increase in indirect taxes in 2023-24 was mainly attributed to the 12.7% contribution from the GST collection.

GST has played a remarkable role in reducing logistics costs and increased the average distance trucks carrying goods travel. Trucks no longer wait at borders and this has reduced travel time by up to 30%, the survey said.

Despite the single market creation and boost in manufacturing that GST has enabled, the report calls for public policy action to boost competitiveness to improve the manufacturing base further.