As the government trudges towards its annual direct tax target of Rs 4 lakh crore, things dont look too rosy either on the indirect tax front. In such a scenario, what are the expectations on the indirect tax front from Budget 2010? Ashwin Mohan reports.

Experts say the government has a tight ropewalk by which to increase tax revenue but not disturbing the momentum of economic recovery.

The indirect tax kitty, comprising customs duty, excise duty and service tax has shrunk by 21% in the first seven months of the fiscal

Says Heetesh Veera, Partner, Ernst & Young, In terms of customs duty to be specific, they would expect that there is some reduction.

Excise duties, they would require some clarification on availability of cenvat credit. And as far as service tax is concerned, there is lot more clarity required on export of services to enable India to export their services more pro-actively.

Experts say tax incentives for the infra sector, in particular, could stimulate demand in other sectors as well. Experts also add that clarifications are required on several grey areas, which have contributed to needless litigation between corporate India and the revenue authorities.

Latest data indicates that on the collection front, service tax down is 5%, excise is down 19% and customs has dipped by a whopping 30%. And these uninspiring numbers will definitely matter when it comes to indirect tax rates in the coming days.