« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  CBDT may limit exemption on capital gains... Income-tax on gross income or net income?... » Service tax hits excise mop-up August, 07th 2007 For the first time ever, Cenvat credit, utilised by companies to pay taxes, overshot net excise duty collections during fiscal 2006-07.   The finance ministry data show that Cenvat credit utilised by companies grew 34 per cent to Rs 1,28,698 crore in the last fiscal, while net excise duty collections (cash collections) rose 5.8 per cent to Rs 1,17,088 crore.   Service tax collections, which rose 62 per cent to Rs 37,482 crore in 2006-07, are projected to grow 34 per cent to Rs 50,200 crore in 2007-08. That means, companies paid their excise duties more by utilising tax credits available to them, rather than in actual cash.   Experts attribute the 6-7 per cent growth rate in excise collections in recent years to the high service tax that companies pay on business purchases or input services, which they follow up by claiming Cenvat credit. Besides service tax, area-based exemptions, liberalisation of small-scale industry scheme and exports are also adversely affecting central excise revenue.   Other factors contributing to higher Cenvat utilisation include availability of Cenvat credit against special additional Customs duty, dealers invoice and duty paid on capital goods.   Though gross excise collections (net collection and Cenvat utilisation) rose 19 per cent to Rs 2,45,786 crore in 2006-07, the same was not reflected in net excise duty collections (see chart) due to surge in service tax collections.   With an increasing number of business purchases coming under the service tax net, input taxes paid by manufacturers have gone up rapidly. More business-to-business transactions means more input taxes and more credit utilised, said Satya Poddar, partner, Ernst & Young.   He feels that a clearer picture will emerge if service tax collections and Cenvat credit utilisation trends are compared.   By increasing service tax on inputs, the Centre is not getting additional revenue. Instead of focusing on final consumption, the service tax now covered business deals, said Poddar.