The number of tax refunds came down to Rs 7,000 crore in July compared to earlier months, taking the total refunds in April-July to Rs 53,000 crore a little less than Rs 57,000 crore of refunds issued in the entire 2010-11. Due to a higher refund outgo in the four-month period, net direct tax collections for April-July stood at Rs 79,000 crore, about eight per cent lower than the corresponding period of 2010-11.

Direct tax collections so far are only about 15 per cent of the Budget Estimate of Rs 5,32,651 crore for the current financial year. The collections are usually higher in the second half of the year. Indirect tax receipts in April-July, on the other hand, are 32 per cent of the Budget Estimate of Rs 3,92,908 crore. Indirect tax mop-up in the first four months has increased 16.4 per cent to Rs 31,493 crore.

The rise in indirect tax collections in July was driven by a 54.7 per cent rise in service tax receipts to Rs 7,783 crore. Customs duty kitty swelled by 11 per cent to Rs 11,483 crore, whereas excise duty collections showed a small increase of 4.7 per cent to Rs 12,227 crore. The finance ministry suffered a loss of Rs 1,600 crore in July due to a removal of excise duty on diesel. It had to forgo over Rs 1,400 crore on account of a reduction in the basic customs duty rate on petroleum products.

Central Board of Excise & Customs chairman S Dutt Majumder, when contacted, said: This is a good showing despite the duty cuts. It shows manufacturing is not doing that bad. In service tax, we cannot expect the same kind of growth in the coming months but it may still grow at 30-35 per cent.

He said the huge jump in service tax collections was due to the introduction of Point of Taxation Rules where the assessee has to pay service tax on accrual basis to the government in advance.

The growth in excise and customs without the duty cut would have been about 18 per cent and 25 per cent for excise and customs, respectively.