Rise in indirect tax collections well below year's 26% target

Excise duty collections fell, indicating manufacturing is yet to gather steam

Indirect tax collections rose 12.3 per cent in September over a year earlier, to Rs 48,012 crore as compared to Rs 42,738 crore in the same month last year, due to a big rise in customs duty collection.  

Even so, the September growth was lower than the 26 per cent target for the current financial year. The excise duty collections also fell indicating manufacturing is yet  to gather steam. Collections from customs duty were Rs 18,116 crore in September, compared with Rs 13,644 crore in September 2013, marking a rise of 32.8 per cent. Service tax collections rose 5.8 per cent to Rs 15,608 crore.

The data, issued by the finance ministry on Tuesday, indicated manufacturing activity is yet to pick up. Excise duty collection dropped 0.4 per cent to Rs 14,288 crore in September, compared to the same month last year. Manufacturing output had declined 1.4 per cent in August, after a fall of one per cent in July.

In the first six months of the current financial year (April-September), indirect tax collections rose 5.8 per cent to Rs 241,811 crore, against Rs 228,619 crore in the corresponding period a year before.

Total indirect tax collections in these first six months were only 38.8 per cent of the Budget Estimate of a 26 per cent rise for the full year, of Rs 623,244 crore.

Excise collection contracted 0.6 per cent during April-September to Rs 75,021 crore. While Customs collection rose 5.5 per cent to Rs 89,324 crore in these six months, Service tax collection grew 13.1 per cent, to Rs 77,466 crore.