In the financial year 2025-26, the government has performed well in terms of indirect tax collection. According to a government official, the total recovery was slightly more than the Revised Estimate (RE). The government had set a target of about ₹15.52 lakh crore for FY26, which has been exceeded. This includes income from customs, excise and GST.
Strong contribution from customs, excise and GST
According to government data, there was 102% recovery from custom duty and 101% recovery from excise duty, which means both were ahead of their target. Whereas Central GST (CGST) collection was 100.8%, which is almost equal to the target. Overall GST and non-GST collection was 101.2%, which shows the tax collection capacity of the government.
Concern over reduction in cess collection
However, the recovery from health and national security cess was less than expected. This cess is imposed on units manufacturing pan masala. The government had set a target of raising ₹2,330 crore from this, but the actual recovery was only 63%. This clearly showed the deficiency in this category.
Effect of new system, hope for further improvement
This cess has come into effect from 1 February 2026 and is levied in addition to the 40% GST. Since this is a new system, the collection was less in the initial phase. Officials believe that as the system stabilizes, there will be improvement in recovery.
Further goals and government strategy
In the current financial year, the government has set a target of raising ₹14,000 crore from this cess. The government is trying to further strengthen tax collection and develop new sources of revenue. Overall, the FY26 performance bodes positive for the government, although improvements in some areas still remain.
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