Challenges in Corporate Tax and Excise Duty Collections
The Indian government faces challenges in achieving Budget Estimates (BE) for Corporate Tax (CT) and Union Excise Duty in FY25. While the BE for CT is ₹10.20 lakh crore, the actual growth rate of 8.6% falls short of the 10.5% target due to reduced urban demand, monsoon disruptions, and election-related spending limits. Union Excise Duty collections are also impacted by prior rate cuts, with monthly collections needing substantial increases to meet targets. Despite shortfalls, improved GST and non-corporate tax collections are mitigating fiscal deficit concerns. Analysts expect revenue growth in Q3 FY25, driven by rural demand and festive spending.
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