Indirect tax kitty goes up by 16%

After months of slowdown in collection of indirect taxes, the central excise registered a growth of nearly 10% at Rs 12,546 crore.

NEW DELHI: After months of slowdown in collection of indirect taxes, there was some optimism with the figures of December 2011 when central excise registered a growth of nearly 10% at Rs 12,546 crore, and the total indirect tax revenue went up by 16% to Rs 2.86 lakh crore in April-December, 2011, or 75% of the budget estimates of Rs 3.93 lakh crore for the current fiscal.

In September and November, the growth in excise collection was -8.7% and -6.5% respectively. Even in October 2011, the excise duty growth was as low of 5%. However, the sudden rise in collection is seen as primarily coming from small-scale industries that may have cleared their duties in December after crossing the threshold limit. The customs duty collection went up by 4% in December.

"We will meet the budget target of Rs 3,92,908 crore for 2011-12," said S K Goel, chairman of the Central Board of Excise and Customs (CBEC)

Speaking to reporters on Tuesday, Goel said there was robust growth in the service tax collection at 49%, which will make up for the loss on
duty forgone on petroleum products. The government is set to lose at least Rs 36,000 crore in this fiscal after it slashed duties on petroleum products in June.

On Tuesday afternoon, finance minister Pranab Mukherjee met the chairmen of CB E C and the Central Board of Direct Taxes and reviewed revenue collection with the chief commissioners of northern zone. The customs duty collection in December was Rs 12,608 crore as compared to Rs 12,109 crore in the previous year and in April-December, the total customs duty realized was Rs 1,12,670 crore as against the budget target of Rs 1,51,700 crore
for this fiscal. On the excise front, the duty collected in April-December period was Rs 1,05,411 crore as against the budget estimate of Rs 1,59,208 crore for 2011-12.

The growth in service tax has been phenomenal at Rs 67,706 crore in April-December period as against Rs 49,357 last year. This makes for 83% of the year's target for service tax where budget estimate was Rs 82,000 crore.

Goel said the growth in customs duty could also be a result of devaluation of the rupee and should not be seen as increase in imports only, though there could be some marginal increase.