Indirect tax target challenging but achievable, says Jaitley

Finance minister Arun Jaitley on Monday conceded that the indirect tax collection target, pegged at Rs 6.23 lakh crore in the Budget for 2014-15, is challenging. He, however, quickly added that the target is very much achievable. The collections grew 4.5 per cent in the first quarter against 25 per cent projected for the entire year.

Addressing the annual conference of chief commissioners and directors-general of customs, central excise and service tax here on Monday, Jaitley said the past few years have been somewhat difficult for the Indian economy.

The modest economic growth was coupled with a static or negative growth in manufacturing, which took a toll on the indirect taxes, he noted.

India's economy grew less than five per cent in the past two financial years - at 4.5 per cent and 4.7 per cent in FY13 and FY14, respectively. Manufacturing growth stood at 1.1 per cent in 2012-13, while it contracted 0.7 per cent the next year.

"In order to spur the growth, we have in the past few months concentrated on improving areas of manufacturing and infrastructure," said Jaitley.

He added figures relating to the manufacturing sector in the initial months of the current financial year are quite encouraging. After falling for two consecutive months, manufacturing rose 2.5 per cent in April and 4.8 per cent in May.

"If this trend continues for a few more months, only then will it constitute a pattern," said Jaitley.

He asked senior officers of the Central Board of Excise and Customs to work as a facilitator for tax payers and at the same time take action wherever they find cases of revenue leakages or tax evasion.

The finance minister also stressed the need for reducing tax litigation and improving tax settlement mechanism in order to unlock the money thus held up.

Revenue secretary Shaktikanta Das said indirect tax collections rose just 4.5 per cent in the first quarter of the current financial year, but the growth was 13.5 per cent in June. "Service tax accounted for nearly 28 per cent growth," he said, adding that the growth was "very good" in July as well.