Led by a sharp jump in service tax mop-up, indirect tax collections in May increased 16.1 per cent to Rs 37,166 crore, against Rs 32,019 crore in the corresponding month last year. Although the growth in May was better than the 10.4 per cent recorded in April, it is still lower than the governments estimated indirect tax collection growth of 27.2 per cent by the end of 2012-13.
Service tax collections showed a massive jump of 45.4 per cent in May 2012. The collections stood at Rs 8,607 crore, compared with Rs 5,918 crore in the corresponding month of 2011-12. Central excise collections in May stood at Rs 14,693 crore, compared with Rs 12,640 crore in the year-ago period a growth of 16.2 per cent. Custom duty collections, which fell 8.8 per cent in April, also increased three per cent at Rs 13,866 crore in May, against Rs 13,461 crore in the last year period.
The percentage of growth in revenue during May 2012, after adjustment for deep cuts in duty rate on petroleum and petroleum products made effective from June 25, 2011, reflects the overall growth of 27.6 per cent over the revenue collection during May, 2011, the Central Board of Excise & Customs (CBEC) said in a statement on Monday. Total tax collections during April-May stood at Rs 70,211 crore, compared with Rs 61,955 crore in the corresponding two months of the last financial year, a cumulative growth of 13.3 per cent.
While duty cuts on petroleum products have hit excise and customs collections, service tax collections have been growing at a healthy pace. Introduction of a Negative List for taxation of services from July 1 may give further fillip to the collections. The government has set an indirect tax collection target of Rs 4,99,694 crore.
Its last year target of Rs 3,92,781 crore slightly fell short of the estimates.
Last week, Finance Minister Pranab Mukherjee had exuded confidence that the target would be surpassed despite being significantly higher than last years actual collections.This target has been fixed keeping in view the increase in central excise and service rate from 10 to 12 per cent and the observed buoyancy in service tax collections, he said.