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FY22 tax collection exceeds budgetary estimate, rises to over Rs 27 lakh cr

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Accelerated economic recovery along with enhanced compliance pushed India’s FY22 tax collection to Rs 27.07 lakh crore, almost Rs 5 lakh crore above the Union budget’s estimate of Rs 22.17 lakh crore.

Accordingly, the current tax collection grew by 34 per cent over last year’s revenue collection of Rs 20.27 lakh crore, led by a growth of 49 per cent in direct taxes and supported by a 20 per cent growth in indirect taxes.

“This revenue growth has been propelled by rapid economic recovery after successive waves of Covid, supported by one of the largest immunisation programme of the world run by the government,” the Ministry of Finance said.

“It also signifies a robust recovery in the economy. This was also supplemented with better compliance efforts in taxation. Various efforts were taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence.”

Besides, FY22 marked the highest tax-GDP ratio of 11.7 per cent, with direct tax to GDP ratio at 6.1 per cent and indirect tax to GDP ratio at 5.6 per cent.

“The tax buoyancy (which is a measure of growth in tax revenues as compared to GDP growth) is at a very healthy figure of 1.9, with 2.8 for direct taxes and 1.1 for indirect taxes. The ratio of direct to indirect taxes recovered from 0.9 in 2020-21 back to 1.1 in 2021-22.”

As per the ministry, the gross corporate taxes during 2021-22 was Rs 8.6 lakh crore against Rs 6.5 lakh crore last year, which shows that the new simplified tax regime with low rates and no exemptions has lived up to its promise. Furthermore, the ministry said that during the year, the income tax department gave refunds of Rs 2.24 lakh core.

“During last two years, the effort has been to clear backlog of refunds to infuse liquidity into the hands of businesses.”

“During the year, 2.4 crore refunds were issued that included 2.01 crore related to the year 2021-22, for which the returns were filed till 31st March 2021.”

Additionally, this has been possible due to faster processing of returns.

“During 2021-22, 22.4 per cent returns were processed on the same day and around 75 per cent returns were processed in less than a month time. The average processing time for returns during 2021-22 was 26 days. During the year, 7.14 crore returns were filed as compared to 6.97 crore last year.”

According to the ministry, on the indirect tax front, GST saw “an exemplary growth during 2021-22 despite two waves of Covid-19 pandemic”.

“CGST revenues increased from Rs 4.6 lakh crore last year to Rs 5.9 lakh crore in 2021-22. The average monthly gross GST revenue in 2021-22 was Rs 1.23 lakh crore as compared to Rs 94,734 in 2020-21 and Rs 1.01 lakh crore in 2019-20.”

“This again signifies a robust rebound in the economy. This has been complemented due to various measures taken to improve compliance. This shows that the GST ecosystem has appreciated the invoice-based discipline in GST, which not only benefits GST revenues but also contributes to overall formalization in the economy.”

Additionally, the ministry said that the level of economic recovery can also be seen from the value of e-way bills generated every month, which has improved from Rs 16.9 lakh crore in January 2021 to Rs 25.7 lakh crore in March 2022.

In addition, during 2021-22, Customs duty has witnessed a growth rate of 48 per cent.

“During the last two years, the government has undertaken comprehensive review and rationalisation of the Customs tariff structure through extensive consultations and crowd sourcing and has rationalised various exemptions and simplified the tariff structure.”

“It is expected that the trend of recovery in the economy and tax revenues of the government will continue to grow.”

Business

8th Pay Commission begins discussions in Chandigarh

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New Delhi, Sep 16: The eighth Central Pay Commission is set to begin a three-day visit to Chandigarh on Wednesday, as part of its consultations on pay and pension-related matters.

The commission will hold meetings with civil service unions, pensioner groups and representatives of the regional administration till Friday.

The discussions are expected to focus on pay conditions and submissions from public sector stakeholders in northern India.

The eighth Central Pay Commission is led by former Supreme Court Justice Ranjana Prakash Desai while its members include Pankaj Jain, a former IAS officer serving as Member-Secretary, and Pulak Ghosh, a tenured Professor of Finance and a member of the Economic Advisory Council to the Prime Minister.

Representatives from Punjab, Haryana, Himachal Pradesh and Chandigarh are expected to submit their views on the pay and pension revision during the commission’s meetings.

Employee associations, pensioner groups and other stakeholder bodies, including those representing railway and defence personnel, will put forward their views before the panel.

The feedback gathered during these consultations will form part of the inputs considered while framing its recommendations.

The commission’s work could have a bearing on the financial interests of more than one crore employees and pensioners.

The affected population includes around 50 lakh Central government employees and about 65 lakh pensioners, covering defence and railway personnel as well as retirees.

Employee representatives are seeking a higher fitment factor, which would raise the base used to calculate salaries under the next pay revision.

Unions are also calling for changes to the Dearness Allowance (DA) framework, including more frequent revisions and a possible merger with basic pay after a specified threshold is reached.

Several submissions seek a review of house rent allowance (HRA), transport allowances and hardship-related payments, with demands for higher rates that take account rising costs in cities and difficult postings.

Pensioner organisations are seeking stronger safeguards for retirement income, enhanced family pension provisions and better healthcare support after retirement.

Employee bodies are also raising concerns over promotion structures, service conditions and the competitiveness of government compensation as part of efforts to sustain workforce morale and recruitment.

Under the timeline set out in its Terms of Reference, the commission has 18 months from its constitution on November 3, 2025, to submit its recommendations.

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Indian markets trade higher in early deals; FMCG, banking shares lead

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Mumbai, Sep 16: Indian stock markets traded higher on Wednesday with equity benchmarks rising around 0.7 per cent each in early deals amid buying in FMCG, banking, cement and auto stocks.

Nifty was at an intraday high of 23,281, an increase of 162 points or 0.70 per cent in morning trade, while Sensex rose over 500 points or 0.67 per cent to 74,505.

Sector-wise, Nifty FMCG, Nifty PSU Bank, Nifty Cement and Nifty Auto were top gainers which gained up to 1.45 per cent.

Meanwhile, Nifty Oil & Gas rose 0.54 per cent, while Nifty Private Bank gained 0.33 per cent.

On the other hand, Nifty MidSmall IT & Telecom fell 0.68 per cent, while Nifty MidSmall Healthcare, Nifty500 Healthcare, Nifty Pharma and Nifty Chemicals declined between 0.18 per cent and 0.51 per cent.

According to market experts, the market structure remained weak with elevated US bond yields and high crude oil prices weighing on sentiment.

“Foreign institutional investors have remained sellers over the past five sessions, and could continue to sell on rallies as the US 10-year Treasury yield remains elevated,” they said.

Analysts said the US Federal Reserve’s expected 25-basis-point rate hike was largely priced in making its commentary on the economic outlook and future rate actions more important for markets.

Despite the broader weakness, experts said stock-specific opportunities remained, with the appointment of a new MD and CEO at HDFC Bank and new NPCI norms for digital transactions among events that could influence the market.

On the technical front, experts said the inability of the Nifty to sustain above 23,515 had invalidated the recent upside attempt. Consecutive closes below the lower Bollinger Band and Tuesday’s bearish engulfing candle reflected strong bearishness, although they also suggested that fear may be peaking.

Nifty remains within the 23,260-23,000 support band, offering hopes of a revival. A close below this zone could bring the 22,600-21,800 range into focus, they said.

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Meta to report child safety cases to India’s I4C cybercrime portal (Lead)

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New Delhi, Sep 15: Meta will directly report child safety matters to India’s Cybercrime portal managed by the Indian Cyber Crime Coordination Centre (I4C), the US-based technology giant said on Tuesday.

The decision comes amid heightened scrutiny of Meta in India over the alleged circulation and promotion of child sexual abuse material (CSAM) through advertisements on Instagram.

The government has said the online safety of children is a fundamental principle for every social media platform operating in India and remains non-negotiable, according to government sources. The commitment by Meta is being seen as a first step towards strengthening safeguards for children on social media platforms, they added.

Meta — in a statement on the ongoing issue — said protecting children on its platforms is a priority and that it is committed to working with the government to ensure perpetrators of such crimes are held responsible.

“To collectively strengthen our efforts to combat this harm, Meta will now report child safety matters directly to the Cyber crime portal managed by I4C,” a Meta spokesperson said.

Social media platforms can be used to circulate or facilitate access to CSAM and other forms of child exploitation.

Reporting such cases to law enforcement agencies would help ensure that such incidents are not dealt with solely through platforms’ internal content-moderation systems.

The government has stressed that more needs to be done and that discussions are continuing with other social media platforms to proactively identify and remove harmful content.

It has also warned that action could be taken against platforms that fail to adopt adequate proactive measures to protect children online.

The development comes amid growing global scrutiny of social media platforms over risks to children, including exposure to sexual exploitation, harmful content and online abuse.

In India, social media platforms are governed by the Information Technology Act and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which prescribe due-diligence obligations for intermediaries.

Meta had faced scrutiny after an investigation by the Tech Transparency Project (TTP) found that Facebook and Instagram carried paid advertisements featuring child sexual abuse material this year, including AI-manipulated images of real children.

The investigation also found more than 300 advertisements featuring AI-generated child sexual abuse material on Meta’s platforms.

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