Punjab registers 22% jump in tax revenue

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Punjab registered a 22% year-on-year jump in tax revenue in first 10 months of the financial year 2023-24 due to robust demand and stricter compliance.

The tax revenue stood at Rs.53,617 crore in the April-January period, up from Rs.44,175 crore in the corresponding period of the previous year, according to data on fiscal indicators released earlier this week.

The growth is primarily due to improved goods and services tax, sales tax, and excise collections as well as the state’s share of central taxes, which together account for approximately 84% of the tax revenue of Punjab.

GST boosts tax revenue

The goods and services tax (GST) collection has seen an increase of 16% in the April-January period, going up to Rs.17,295 crore from Rs.14,989.5 crore a year earlier. “The growth is driven by increased business activities and enhanced monitoring to plug revenue leakages. It is the second year in the running that we have registered this kind of growth in goods and services tax,” a taxation department official said, pointing out that GST collection is widely considered an indicator of economic activities.

Double-digit growth in sales tax, excise

The increase in sales tax and state excise collection has also helped the state government improve its tax revenues this year. At Rs.7,446 crore, the state excise is Rs.740 crore, or 11%, more than Rs.6,706 crore collected in the corresponding 10-month period of 2022-23. The state has clocked a 14% y-o-y increase in sales tax, thanks largely to hike in the value-added tax on petrol and diesel. The big boost for tax revenue has come from Punjab’s share of central taxes, which has seen an impressive increase of 23%.

The state has received Rs.2,755 crore more this time than last year because of robust tax collection. The tax revenue in the first April-Jan period is 76.28% of the budget estimates for 2023-24, indicating that it may fall short of the annual target of Rs.70,293 crore. The non-tax revenue has shown an increase of 12% year-on-year during this period, but it is way below the FY24 target.