Will meet FY12 indirect tax target, says FinMin

The finance ministry is sure that it will meet indirect tax collections target of Rs 3.98 lakh crore this fiscal, despite industrial growth slowing down to 5.8 per cent in the first four months against 9.7 per cent in the corresponding period of last fiscal.

“Our revenue collection is robust right now. Total indirect tax collection is 23.9 per cent up till August. I don’t think, there is any reason for concern (on meeting target). We are confident of achieving the target,” Central Board of Excise and Customs (CBEC) Chairman S Dutt Majumder told reporters on the sidelines of a CII event here.

He said central excise and service tax collections were good and so was customs duty collections.

Led by robust service tax collections, the indirect tax mop-up in the April-August period rose by 23.9 per cent to Rs 1,57,725 crore.

The government has pegged indirect taxes collections at Rs 3.98 lakh crore for this fiscal, representing a growth of 18 per cent over Rs 3.38 lakh crore last fiscal.

As industrial growth plunged to a 21-month low of 3.3 per cent in July, doubts were expressed whether indirect tax collections target would be met. Besides, the government has cut customs and excise duties on petroleum products, which contribute Rs 49,000 crore annually to the Centre kitty.

The CBEC chairman, however, maintained that the cut in duties on petroleum products would not impact indirect tax mop up.

At this juncture, the government cannot afford to miss the tax collection target, since fiscal deficit has already reached 7.88 per cent of GDP in the first quarter.

On taxation of services based on a negative list, Majumder said the discussion is on whether to have a negative list or a positive one.

“That call (on negative list) will be taken later, as the Finance Minister Pranab Mukherjee has announced that he wants to have an informed debate on the subject, whether we should go for a positive list or negative list. So we have thrown that debate open,” he said.

Majumder, however, said that service tax collection would increase if the negative list approach is followed.

The finance ministry recently released a draft negative list of services.

The CII members said the industry is in favour of introducing the negative list, but only after the implementation of the Goods and Services Tax.