Describe components of Revenue Receipts (Receipts from tax revenue and non tax revenue).
or
Distinguish between Tax and non-tax revenue. Name two sources of non-tax revenue receipts.  

Components (Sources) of Revenue Receipts (Tax Revenue and Non-tax Revenue). Revenue receipts of the government are divided into two groups, namely, (i) tax revenue, and (ii) non-tax revenue. Tax revenue consists of proceeds of taxes and other duties levied by the Union Government such as income tax, corporate tax, excise duty, custom duty, etc. Non-tax revenue consists of all receipts from sources other than taxes. These are shown in the above chart. Components or sources of revenue receipts are explained below.
(A) Tax revenue. Tax revenues consist of proceeds of taxes and other duties levied by the Union Government. It is the main source of government revenue. A tax is a legally compulsory payment imposed by the government on income and profit of persons and companies without reference to any benefit. Similarly, government levies taxes on sale of goods (sale tax), manufacturing of goods (excise duty), an export and import of goods (custom duty), wealth, gifts, properties, etc. Government proposals for levy of new taxes, modification of existing tax rates are contained in the budget. The money received from taxes is used by the government to meet the expenditure incurred on providing common benefits to the people. No one can refuse to pay the tax otherwise the defaulter is prosecuted and penalised. The tax payer cannot demand in exchange for tax payment. For instance, a rich man cannot claim that he would not pay taxes to support schools because he has no children. The central government collects revenue in the form of various taxes such as income tax, corporate tax, custom duty, excise duty, expenditure tax, wealth tax, interest tax, etc. The main objectives of taxation are:
(i)    to increase government income,
(ii)    to achieve equitable distribution of income,
(iii)    to restrain use of harmful commodities,
(iv)    to regulate foreign trade, and
(v) to conserve country's resources.
(B) Non-tax revenue. Income from sources other than taxes is called non-tax revenue. It arises on account of administrative function of the government. These are incomes which the government gets in the form of interest, dividend, profit, fees, fines and external grants as explained below. It comprises the following items.
(i)    Interest. It is an important source of government non-tax revenue. Government receives interest on loans given by it to state governments, union territory governments, local governments, private enterprises and the people.
(ii)    Profits and dividends. Of late government has developed a new source of income by starting its own production units called public enterprises which like private enterprises produce and sell goods and services. For instance, Nationalised Banks, Industrial Finance Corporation of India, LIC, STC, HMT, MMTC, BHEL, etc. provide profits. Government also gets dividends on investments made by it.
(iii)    Fees and fines. Government gets income, though nominal, in the form of different types of fees charged by it, e.g., tuition fees in schools, OPD card fees in hospitals, land registration fees, passport fees, court fees, driving licence fees, import fees, etc. Similarly, government gets income by way of fines and penalties imposed by it on various types of offences committed by the law-breakers. These are called administrative revenue. Forfeitures of basic surety or bond (imposed by courts for non-compliance with orders) and escheat (lapsing of property to state for want of legal heir of the deceased) are other sources of non-tax revenue. Administration revenue is revenue that arises on account of administrative functions of the government.
(iv)    Special Assessment. When government undertakes development activities like construction of roads, provision of drainage, street lighting in a particular areas, the value of nearby property or rental value of houses goes up in the vicinity. Clearly, the additional income and profit which the owners of the landed property get is not the result of efforts on their part. Special assessment is, therefore, like a special tax that government levies in proportion to the benefit accruing to property owners to defray the cost of development. It is a payment made once-for-all by the owners of properties for increase in the value of their properties resulting from development activities of the government.
(v)    External grants-in-aid. Government receives financial help from foreign governments and international organisations in the form of grants, donations, gifts and contribution.