- The Centre plans to revise indirect tax revenue assumptions for FY27 due to duty concessions
- FY26 GST collections exceeded targets, with CGST achieving 100.8% of its revised estimate
- Customs and central excise revenues also surpassed Budget targets, reflecting steady tax mop-up
The Centre is set to rework its indirect tax assumptions for FY27, as fresh duty concessions linked to global disruptions raise questions over revenue buoyancy, according to CBIC sources.
This comes even as FY26 collections have outperformed across the board, offering a strong closing note to the fiscal year. Goods and Services Tax (GST) collections have exceeded revised estimates, with CGST alone achieving 100.8% of its target. Overall, GST and non-GST revenues together have come in at 101% of the Budget target, signalling robust compliance and steady economic activity.
Other indirect tax streams have also held up. Customs revenues have reached 102% of the Budget target, while central excise collections stand at 101%, indicating that the government's tax mop-up remains broadly on track despite a volatile global backdrop.
Officials maintain that GST collections are “reasonably well” placed, supported by formalisation trends and stable consumption. However, a note of caution has emerged on the sustainability of this momentum into the next fiscal year.
The key variable now is the impact of recent and potential duty concessions, introduced to cushion the economy from global supply disruptions and price shocks. These measures, while supportive of growth and inflation management, could moderate revenue growth in FY27, prompting the need for recalibration.
Additionally, cess collections have shown a shortfall, partly due to changes under a new regime effective February 1, which may further complicate revenue projections going ahead.
Against this backdrop, the government is expected to undertake a detailed assessment of how tax concessions—particularly on customs duties—will feed into FY27 revenues. The exercise will be critical in balancing fiscal prudence with the need to respond to evolving global uncertainties.
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