Taxes  on  fuel  may rise again to aid Centre’s finances

The Centre’s fiscal deficit for April to September stood at ₹9.14 trillion, or around 114.8% of the deficit budgeted for the whole year. Fiscal deficit is the difference between government’s revenue and expense. This increase is due to a decline in tax collections. Mint explains.

What’s been the tax revenue trend of late?

The gross tax revenue for the first six months of 2020-21 stood at ₹7.21 trillion, or 21.6% lower than the same period last year. This fall has primarily been on account of slump in economic activity following the coronavirus outbreak. Corporate tax and income tax collections have declined by 39.7% and 21.8%, respectively. Customs duty and central goods and services tax (GST) collections have fallen by 43.8% and 34.4%, respectively. Even GST compensation cess, which ensures that states enjoy a steady increase in their GST collections every year, has fallen by 25.2%.