Indirect tax collections picked up pace in July from a year ago, suggesting some improvement in industrial production after the dismal performance in June.

Excise, service tax and customs collections added up to Rs 3,7120 crore in July, up 22.2% from Rs 30,375 crore a year ago, taking the overall kitty for the first four months of the year to Rs 1.45 lakh crore.

The pick-up was driven by a smart 27.6% rise in excise collections, indicating a possible recovery in manufacturing after the 3.2% contraction in June.

Overall industrial growth, as measured by the index of industrial production, fell 1.8% in June because of the large 75.5% weight for manufacturing in the index. Electricity and mining make up the remaining 24.5%.

The rise in excise, tax levied on goods produced at the factory gate, would indicate a revival in manufacturing. Excise collections for the first four months (April-July) were up 18.4%. Service tax collections rose 37.4% as the new negative list based system of imposing the levy widened the tax base.

The new regime announced in the budget for 2012-13 kicked in from July 1 this year. As opposed to the earlier system where select services were taxed, under the new system only those services mentioned in a list are exempt, ensuring that there are no leakages.

The overall service tax collections were up 40% in April-July. Customs collections were up 8.2% only in July because of the 7.6% decline in imports in the month. Overall indirect tax collections were up 15.8% in April-July, well short of the 27% growth assumed in the budget for 2012-13.