The Centre is likely to meet its budgeted net tax revenue target of Rs 28.7 lakh crore for the current financial year, supported by robust collections from direct taxes and goods and services tax (GST), along with an expected improvement in customs receipts, official sources told NDTV Profit.
“Budget tax targets are likely to be met this fiscal year,” a senior government source said, adding that stronger collections across major tax categories are expected to offset a possible shortfall in excise duty revenue.
The Union Budget for FY27 has pegged gross tax revenue at Rs 44.04 lakh crore and net tax receipts at Rs 28.7 lakh crore. The government's assessment comes amid a pickup in direct tax collections and sustained growth in GST revenue, although the final outcome will depend on how collections hold up during the remainder of the financial year.
Net direct tax collections rose 18.3% year-on-year to around Rs 11.25 lakh crore as of October 10, according to government data. The collections included personal income tax receipts of Rs 5.98 lakh crore, corporate tax collections of Rs 4.94 lakh crore and Securities Transaction Tax (STT) receipts of Rs 30,630 crore.
The improvement follows a relatively subdued FY26, when direct tax collections grew 5% to Rs 23.39 lakh crore, falling short of the revised estimate of Rs 24.21 lakh crore. For FY27, the Centre has budgeted direct tax collections of Rs 26.97 lakh crore.
GST revenue has also remained firm. Gross GST collections rose 14.7% year-on-year to Rs 2.04 lakh crore in September, staying above the Rs 2 lakh crore mark for the third consecutive month. Collections during April-September increased 11.6% to Rs 12.46 lakh crore.
Customs revenue is expected to provide additional support, helping the government manage the pressure from potentially weaker excise duty receipts.
Excise duty collections remain a potential weak spot following changes in fuel taxation announced in March. According to mediua reports, reductions in excise duties on petrol and diesel could lead to a revenue loss of more than Rs 1 lakh crore in FY27, even after factoring in additional receipts from taxes on fuel exports.
The extent to which stronger direct tax, GST and customs collections can compensate for this shortfall will be crucial to meeting the annual revenue target.
Meanwhile, the Centre has begun preparations for the FY28 Budget, with the exercise kicking off on October 12, official sources told NDTV Profit. Revenue projections for the next financial year will depend on detailed calculations undertaken during the Budget process.
The government also expects GST process reforms to support overall collections and has advised states to focus on widening the tax base.
Separately, a committee examining faceless assessment is expected to look into complex issues surrounding the framework. A draft framework will be released for public consultation in January.
The revenue outlook remains important for the Centre's fiscal consolidation strategy. The Union Budget has set the FY27 fiscal deficit target at 4.3% of gross domestic product (GDP), alongside capital expenditure of Rs 12.22 lakh crore.
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