The 2009-10 Budget estimates for excise and Customs are unlikely to be achieved going by the collection trend up to end-December 2009. This will be the second successive fiscal when Customs collection targets will not be met.
The spate of duty cuts on both the Customs and the excise fronts in early 2008-09 and during the three rounds of stimulus in the second half impacted revenue collections last fiscal.
We are seeing the same impact in the current fiscal as well. The fall in import volumes and duty cuts have affected Customs collections. It does not seem that Budget estimates will be met both in respect of excise and Customs, official sources said.
The excise collections during December 2009, the latest month for which data is available with the Revenue Department, had been almost flat even as Customs had recorded a dip.
The collection trend shows that both excise and Customs will fall short of the Budget estimates, official sources said, adding that higher direct taxes collections will once again make good the shortfall in indirect tax collections.
For 2009-10, the Centre had budgeted Customs duty collections of Rs 98,000 crore, which is 18 per cent lower than the Budget estimate of Rs 1,18,930 crore for 2008-09. The revised estimate for 2008-09 was Rs 1,08,000 crore.
During April-December 2009, the Customs collections were about Rs 59,000 crore, which was 29 per cent lower than the collection level of Rs 82,741 crore in the same period in the previous year. On the excise front, the Centre had pegged the Budget estimate for 2009-10 at Rs 1,06,477 crore, lower than the Budget estimate of Rs 1,37,874 crore for 2008-09.
The revised estimate for 2008-09 was Rs 1,08,359 crore.
The Centre's excise duty collections during April-December 2009 was about 18 per cent lower than the collection level of Rs 77,108 crore in same period in the previous year, sources said.
India Inc has made a strong plea to the Finance Minister, Mr Pranab Mukherjee, for continuing the existing fiscal stimulus for at least six more months into the next fiscal.
Industrialists have stressed that the economic recovery was still fragile. The captains of auto industry, which is the biggest beneficiary of the stimulus, have submitted that the strong growth in December 2009 appears to be exaggerated on account of low base effect.
Indications are that a partial unwinding of stimulus may be announced in the upcoming Budget.