Decline in customs, excise pulls down Oct indirect tax mop up
November, 08th 2011
Reflecting signs of slowdown, the indirect tax collections during October declined by 2.5 percent mainly on account of drop in realisation from customs and central excise during the month.
Collections from customs dropped by as much as 11.6 percent in October to Rs 11,357 crore from Rs 12,849 crore in the same month last fiscal, Finance Ministry sources said.
In case of central excise, collection during October was Rs 10,527 crore, down 5.3 percent from Rs 11,120 crore in the same period last fiscal.
The decline in the total indirect tax collection would have been much sharper but for the 18.4 percent growth in realisation from service tax.
The service tax collection during the month rose to Rs 8,394 crore from Rs 7,089 crore in October 2010.
The total indirect tax collection during October declined by 2.5 percent to Rs 30,278 crore from Rs 31,058 crore in the corresponding month last fiscal.
However, as far as April-October period is concerned, the indirect tax collection showed an increase of 17.8 percent to Rs 2.01 lakh crore from Rs 1.70 lakh crore during the corresponding period in the last financial year.
The increase during the first seven months of the current fiscal was on account of higher collections from customs, central excise and service tax which rose by 16.6 percent, 10.6 percent and 33.6 percent respectively.
During April-October customs collection was Rs 86,156 crore (up from Rs 73,895 crore during corresponding period of last fiscal), central excise Rs 69,511 crore (Rs 62,838 crore) and service tax Rs 45,391 crore (Rs 33,977 crore).
The decline in indirect tax collection during the later part of the financial year can be attributed to poor performance of the industrial sector and also the decision of the government to reduce duties on petroleum goods to partly offset the impact of price hike on consumers.
The industrial production during April-August moderated to 5.6 percent from 8.7 percent during the corresponding period in 2010-11.
The government in June had reduced customs and excise duties on petroleum goods sacrificing revenues to the tune of Rs 49,000 crore during the fiscal.
For the current fiscal, the government targets an 18 percent year-on-year increase in indirect tax collection at Rs 3.98 lakh crore.