New DELHI: The Delhi government’s revenue collections for the ongoing financial year are expected to fall short of projections, barring Goods and Services Tax (GST) and Value Added Tax (VAT), according to officials. While the two major sources of revenue have performed as anticipated, other streams such as excise duty and motor vehicle taxes have lagged behind budget estimates.
As of February 2025, GST and VAT collections stood at approximately Rs 40,009 crore, aligning closely with the government’s target. However, revenue from motor vehicle taxes reached only Rs 2,810 crore, falling significantly short of the projected Rs 3,600 crore. Similarly, excise collections amounted to Rs 5,516 crore, about 14 per cent below expectations.
The budget for 2024-25 had set an ambitious target of Rs 58,750 crore in total tax revenue. This included Rs 41,000 crore from GST and VAT, Rs 7,750 crore from stamp duties and registration fees, Rs 6,400 crore from excise duty, andRs 3,600 crore from vehicle-related taxes. Officials noted that while GST and VAT collections remained robust, slower revenue growth in other areas posed a challenge. A key concern has been the sluggish collection of taxes from vehicle registrations, which officials attribute to reduced automobile sales and economic factors affecting consumer spending. Excise revenue has also remained lower than expected, potentially due to regulatory changes or shifts in consumption patterns.
With only a short time remaining in the financial year, authorities are evaluating measures to address the revenue shortfall. While GST and VAT continue to be the primary contributors to Delhi’s tax income, the gap in other streams raises concerns about meeting overall fiscal targets.
Officials have indicated that the government may consider policy interventions or administrative measures to improve tax compliance and boost collections in the coming months.
However, the overall financial outlook remains uncertain, with tax revenues from key sources struggling to meet expectations.