Centre exceeds indirect tax collection target for FY26, remains watchful for FY27

In some relief to the exchequer, the Centre has just about exceeded its indirect tax collection target of Rs 15.5 lakh crore for FY26. However, it remains watchful of the revenue mop-up plan for FY27 amidst the current geopolitical conditions that have led to several tax relief measures.

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According to sources, the Centre has exceeded the Revised Estimates (RE) for collection of customs duties, central excise duties and Central Goods and Services Tax in FY26, with only a shortfall in the new Health Security and National Security cess.

In FY26, 102% of the RE of Rs 2.58 lakh crore for customs duty was achieved, and 101% of the target of Rs 3.36 lakh crore for excise duty was achieved. Similarly, it met 100.8% of the RE of Rs 9.58 lakh crore for Central GST.

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Overall, GST and non-GST collections are seen at about 101.2% of the RE for FY26.

The mop-up from the health and security cess only met about 63% of the target, sources said, pointing out that it is a newly levied cess and only two months have passed since it was implemented from February 1, 2026. "It will take some time to settle down," they noted.

For FY27, the Centre has budgeted Rs 16.78 lakh crore from indirect taxes. But sources said that an analysis of the customs and excise duty relief measures announced recently will have to be carried out to understand the actual collection pattern.

"The new fiscal year has just started. It will be difficult to assess, looking at the concessions being given," they noted.

Amidst the West Asia conflict, the Centre on March 27 had cut the excise duty on petrol and diesel by Rs 10 per litre, which would have an impact of about Rs 7,000 crore in just 15 days, Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Chaturvedi had said at the time. Analysts expect a hit of about It is likely to lead to a loss of revenue of over Rs 1.5 lakh crore this fiscal.

Meanwhile, the Centre on Thursday also exempted critical petrochemicals from customs duties. Sources indicated that this would lead to a revenue loss of about Rs 1,800 crore for a period of three months.

The government is yet to work out the revenue impact of the conditional concessional customs duty announced for sales by special economic zones to the domestic tariff area.