Indirect tax collections rose 34.3 per cent in the first eight months of 2015-16, led by high excise collections, signaling a pick-up in economic activity. A part of the collections was on account of additional revenue measures announced in the current year, data released by the ministry of finance on Wednesday showed.
Revenue on account of indirect tax stood at Rs 4.38 lakh crore in the April-November 2015 period from Rs 3.26 lakh crore in the year-ago period. Collections in the first eight months of FY16 were 67.8 per cent of the entire financial year's target. Indirect tax collection in November rose 24.3 per cent to Rs 55,297 crore.
The government's additional revenue measures including the excise rise on diesel and petrol, increase in clean energy cess, withdrawal of exemptions for motor vehicles, capital goods and consumer durables, and the increase in service tax from 12.36 to 14 per cent were attributed to the high collection.
The growth in indirect tax collections in the first six months including service tax, excise duty and customs are close to double the 19 per cent estimated in the Budget.
Bulk of the growth in indirect taxes came from excise duty collections, which grew 67.2 per cent during the period under consideration. Excise collections during April-November 2015 was Rs 1.7 lakh crore, against Rs 1.02 crore in the year-ago period.
In November, the government further increased excise duty on petrol and diesel by Rs 1.6 a litre and Rs 40 paise a litre, respectively. This is estimated to provided another Rs 3,500 crore to the exchequer.
The impact of Swachh Bharat cess at 0.5 per cent, which came into effect from November 15, will be seen in the coming months.
Service tax revenue expanded 25 per cent to Rs 1.27 lakh crore, making up for 61 per cent of the Budget target.
The customs revenue grew 14.7 per cent to Rs 1.4 lakh crore during the first eight months of FY16.
For 2015-16, the government aims to collect Rs 6.46 lakh crore from indirect taxes.
The finance ministry is expecting a 5-7 per cent, or a Rs 50,000-crore, shortfall in the total tax collections for the financial year on account of lower-than-estimated revenue from direct taxes.
The government expects robust indirect tax collections to make up for the shortfall.
The government remains confident of a 7.5 per cent economic growth for 2015-16.