Excise duty collection declines by 6.5% in November
December, 12th 2011
On the back of slowdown in economic activities and unfavorable environment in global economy, excise duty collections for the month of November declined by 6.5 per cent. However, despite the drop in revenue collections the senior government officials were confident of achieving the indirect taxes target projected in the budget.
The Central Board of Excise and Customs (CBEC) Chairman SK Goel said, "I am optimistic of achieving the revised indirect tax targets of over Rs 4 lakh crore." The governments confidence is backed by the surge in the customs and service tax. During November, the domestic car sales increased by 7 per cent, which hints that industrial activities may have gained momentum, this increase is expected to increase excise collections.
In November 2011, the customs duties collections increased by 15.2 per cent to Rs 100,062 crore and service tax collections also jumped by 43 per cent to Rs 7,232 crore. In November, overall indirect tax collections increased by 6.36 per cent to Rs 31,082 crore compared to Rs 29,222 crore in the same period of last year. During the first eight months of current financial year, the indirect tax collections increased by 16.8 per cent to Rs 2,52,544 crore. The CBEC has already achieved 63.04 per cent of the budget estimates of Rs 3.99 lakh crore.
Goel said the excise duty collections, a tax imposed on goods at the factory gate and considered as one of the few accurate gauges of industrial activity had been hit largely due to cut on duties on oil products earlier in the year. By adding further he said, "there has been a fall in Central Excise, which is a matter of concern.... I have called a meeting to discuss why central excise is showing negative growth."
During October, IIP grew by just 1.9 per cent and economic growth for the first half of 2011-12 grew by 7.3 per cent. This decline in economic growth and industrial production has raised concern for meeting the revenue collection targets. However, the imports for the month of November increased by 29.1 per cent, this surge in import with decline in Indian rupee against American dollar are expected to help custom revenue collections buoyant.