Indirect Tax Collections miss target: Finance Ministry
April, 17th 2009
Finance Ministry sources have revealed that customs, excise, and service tax collections are Rs. 16,000 crore off target in last financial year and Rs 13,000 crore short of the actual collections.
For FY 08-09, customs duty has fallen to Rs. 99,000 crore from over Rs 1 lakh crore and excise revenue has slipped from over Rs 1.22 lakh crore to Rs. 1.07 lakh crore.
Service Tax has grown from Rs 51,000 crore to Rs 59,000 crore for FY 08-09. According to Finance Ministry sources, these numbers may lead to reversal in the 2% cut in the excise duty to prop up tax revenues.
Due to the high gap between the central excise rate (8%) and the state VAT rates (12.5%), the centre is not left with enough power to negotiate with the state for a reasonable share of tax revenues.