The government’s indirect tax revenue grew 36.8 per cent in October 2015, compared to the same month in the previous year. Till October 2015, this financial year has seen cumulative indirect tax revenues grow 35.9 per cent over the same period last year. Excise collections registered the highest growth.
“Collections on account of Central Excise increased from Rs 87,588 crore in April-October 2014 to Rs 1, 47,685 crore in April-October 2015 and thereby registering an increase of 68.6 per cent,” the government said in a release on Monday.
Finance Minister Arun Jaitley and Chief Economic Adviser Arvind Subramanian have both spoken earlier in the year of how a strong growth in excise collections, even after discounting recent revenue-generating measures, suggests a revival in manufacturing.
However, a deeper look into the excise numbers shows that an overwhelming proportion of excise collections are coming from petroleum and tobacco products, not strictly manufacturing itself.
Together, these two categories accounted for 80 per cent (Actual) of the entire year’s excise duty collections in financial year 2013-14. The various duties on petroleum and tobacco products accounted for 79 per cent (Revised Estimates) of the excise collections in 2014-15.
This financial year, the two categories are projected to make up around 82 per cent of excise collections.
The government has taken steps to increase indirect tax collections, and some of these have to do with increases in excise duties on petrol, diesel, and tobacco. However, even without these the collections from petroleum and tobacco would have still growth healthily.
“Stripped of all these additional measures, indirect tax collections increased by 11.6 per cent during April-October 2015 as compared to April-October 2014. These collections continue to suggest a healthy growth in the underlying tax base,” the government release said.
Service tax collections increased 26 per cent, from Rs 89,379 crore in April-October 2014 to Rs 1,12,727 crore in April-October 2015. Customs collections grew 16.8 per cent in the same period.