Arrange the following sources of revenue of the Central Government in ascending manner in terms of percentage contribution to the total revenues of the Central Government in 2023-24

Correct — C, Custom, Union Excise Duty, Corporation Tax, GST. The 2023-24 budget's own account of where the rupee comes from puts goods and services tax at about 17 paise, corporation tax at about 15, union excise duties at about 7 and customs at about 4. Arranged from smallest to largest that gives customs, then union excise, then corporation tax, then goods and services tax — which is what option (c) prints. The shape is worth remembering rather than the exact paise: customs shrank steadily as tariffs came down after 1991, and union excise shrank when most excisable goods moved into the goods and services tax in 2017, leaving petroleum products as the main survivor. The two large direct and indirect heads now dominate.

• (a)Union Excise Duty, Custom, Corporation Tax, GST — It puts union excise below customs. Excise is roughly seven paise in the rupee against about four for customs, mainly because central excise still applies to petrol, diesel and tobacco.
• (b)Custom, Union Excise Duty, GST, Corporation Tax — It gets the first two right and then inverts the top pair. Goods and services tax collections exceed corporation tax collections, so goods and services tax must come last in an ascending list.
• (d)Custom, GST, Union Excise Duty, Corporation Tax — It places goods and services tax second from the bottom, ahead only of customs. Goods and services tax is the largest single revenue head in the Union budget, not the second smallest.

Union tax revenue now rests on four main pillars — goods and services tax, corporation tax, income tax and the residual indirect taxes of customs and union excise. Goods and services tax subsumed central excise on most goods, service tax, countervailing duty and a long list of state levies from July 2017, and the Union's share of it is the central goods and services tax plus its portion of the integrated tax. Customs revenue depends on tariff rates and on the import bill, and both have been trending in ways that keep its share small.

The word ascending is where marks are lost. A candidate who reads the ordering correctly and knows only two facts — that customs is the smallest of the four and that goods and services tax is the largest — has already isolated a single option. It also helps to remember that the budget's rupee-comes-from chart includes borrowings, at about a third, so the tax shares quoted from it are shares of total receipts rather than of tax revenue alone; the ordering of the four heads is the same either way.

• In the 2023-24 budget, goods and services tax accounted for about 17 paise of every rupee of receipts and corporation tax about 15.
• Union excise duties accounted for about 7 paise and customs about 4.
• Borrowings and other liabilities were about 34 paise, the single largest source of receipts.
• Goods and services tax replaced most central excise duties from 1 July 2017, leaving petroleum products and tobacco outside it.
• Customs revenue has fallen as a share of the total since tariff reform began in 1991.

• Answering the descending order when the stem says ascending.
• Assuming central excise vanished with the goods and services tax; petroleum and tobacco keep it alive.
• Reading the budget's rupee chart as a share of tax revenue when it is a share of all receipts, borrowings included.

An ordering item on revenue shares that can be reduced to two comparisons — which head is smallest and which is largest.

• practice — not a real PYQ

  Which of the following is the largest single source of receipts in the Union budget?

  • (a)Goods and services tax
  • (b)Corporation tax
  • (c)Borrowings and other liabilities
  • (d)Customs

  Answer(c) Borrowings and other liabilities — about a third of total receipts, ahead of every tax head.

• practice — not a real PYQ

  Which one of the following remained outside the goods and services tax when it was introduced in 2017?

  • (a)Services
  • (b)Petroleum products
  • (c)Textiles
  • (d)Automobiles

  Answer(b) Petroleum products — which is why union excise duty still yields significant revenue.