Indirect tax collections recorded a modest growth of 10.4 per cent at Rs 33,045 crore in April 2012, against Rs 29,936 crore in the year ago period, as customs collections fell by 8.8 per cent due to duty drawback outgo and cut in duty on petroleum products last year.

This rise in collections in the first month of the financial year is significantly lower than the governments target of 27 per cent increase in indirect collections in 2012-13.

For fall in customs duty collections, there are two-three reasons, including cut in duty on petroleum products. We have given more drawbacks in April this year, compared to last year, by about Rs 500 crore. Also, there was a strike on account of jewellery gold imports which also affected collections in April, Central Board of Excise and Customs (CBEC) Chairman S K Goel told reporters on Monday.
Service tax mop-up contributed Rs 8,846 crore to the total indirect tax collection kitty by growing at 36.5 per cent in April 2012. Excise duty collections increased by 17.8 per cent to Rs 12,605 crore, while customs duty collections declined to Rs 11,594 crore from Rs 12,714 crore in April 2011.

The government increased both the excise duty and service tax by two per cent each to 12 per cent in the Budget. It estimated its total indirect tax collections to reach Rs 4,99,694 crore in 2012-13, against the actual collection of Rs 3,92,781 crore in 2011-12.

The last years collections fell short of the Budget Estimate as the economic growth slowed down and duties on petroleum products were slashed. In June 2011, the government had removed customs duty of five per cent it levied on petroleum crude, brought down import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and on other petroleum products to 5 per cent from 10 per cent. It also abolished the Rs 2.6 per litre basic excise duty on diesel, resulting in an estimated annual loss of Rs 49,000 crore to the government in 2011-12.