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Indirect tax collection growth shows economy improving
August, 12th 2015

The Finance Ministry on Wednesday said a steady 37 percent growth in indirect tax collections in four months to July reflects that underlying momentum in the economy is improving.

"These collections indicate that the underlying momentum in the economy continues to improve across all sectors," Chief Economic Advisor Arvind Subramanian told reporters here.

Indirect tax revenue jumped over 37 percent to over Rs 2.1 lakh crore in April-July of the current fiscal on the back of higher excise duty mop-up.

"The growth in underlying indirect tax collection for the first four months suggest increase in nominal GDP growth," Subramanian said.

The excise duty collection reflects hike in excise duty on diesel and petrol, withdrawal of exemptions for motor vehicles and the increase in service tax in June.

"It also includes Customs collections data, which have also been helped by rupee depreciation of 6 percent between April and July," he said. In April-July, the excise collections jumped 75.4 percent to Rs 83,454 crore.

While revenues from service tax rose 20.1 percent to Rs 60,925 crore, those from Customs surged 21 percent to Rs 66,076 crore.

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