Budget 2024: Finance Ministry in its review report on the economy has said that India will have to expand the tax base to strengthen the finances of both the union and the state government. The report further mentions that this will enhance public spending to boost growth.
"The expansion of the tax base that the GST facilitates will strengthen the finances of the Union and state governments, enabling growth-enhancing public expenditures,"it said.
About GST, the review added that its adoption has led to the unification of the domestic markets, incentivises production on a larger scale while reducing logistics costs. The average gross monthly collection via GST has risen to Rs 1.5 lakh crore in 2023 from up from 0.9 lakh crore in 2018. The number of GST taxpayers has also risen to 1.4 crore in 2023 from 66 lakhs since its introduction in 2017 with a larger number of smaller businesses entering the regime.
The report also adds that the reforms in taxation in the last decade has reduced the tax burden on corporations and individuals and removed the distortionary incentives from the economy.
"The expansion of the tax base that the GST facilitates will strengthen the finances of the Union and state governments, enabling growth-enhancing public expenditures,"it said.
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On Direct Tax, the report said that reducing corporate tax and income tax rates have gone a long way in enhancing the ease of doing business. However, this excludes sovereign wealth funds and pension funds from taxes, and removing the Dividend Distribution tax. The number of income tax payers rose to 9.37 crore in FY23 from 5.26 crore in FY14.
The Centre's net tax receipt is expected to be at ₹23.30 lakh crore, which is 11.7% of the revised estimate in the preceding year, FY23.