The reduction in excise duty rates as part of the Centre's stimulus package has impacted excise collections in North India, which declined 51% in the first seven months of this fiscal against the same period last year.

The total central excise collection from Punjab, Himachal Pradesh , Jammu & Kashmir and Chandigarh during the April and October period dipped to Rs 294.50 crore as compared to Rs 596.29 crore collected in the same period last fiscal.

In view of the drop, the government has revised its target of central excise collections from the region. Earlier, the government had projected to earn Rs 914.68 crore from this fiscal, as central excise tax during 2009-10. But now it has revised the target and estimates to earn Rs 492 crore.

PK Sirohi, chief commissioner for customs, central excise and service tax, Chandigarh told FE, Excise collections were mainly hit by a considerable reduction in excise duty rates as part of its stimulus packages in December 2008 and February 2009. The recession also impacted the collections.

Another major reason behind the dwindling revenue is that more than 10 large tax payer units (LTU) shifted base from Punjab, he added.

We suffered a loss of Rs 92 crore this fiscal as large units like Nestle India Ltd, ACC Ltd, Hindustan Unilever Ltd, Ranbaxy Laboratories India Ltd, PepsiCo India, GlaxoSmithkline shifted base. These firms used to bring major revenue for us. On account of their exit, we have suffered a loss of Rs 350 crore in last two years, he pointed out.

In addition, a 20% dip in the customs collections has been seen from the region. Custom collections in Chandigarh zone went down to Rs 356.67 crore as on October 2009 against Rs 448.09 crore in the same period previous fiscal.

The Central Excise Department had targeted to collect Rs 915 crore as excise from its Chandigarh zone. Only the service tax collection registered 7% rise.