Sagging Excise Mop-Up Clouds Revenue Target
The collections under customs at the end of August totalled Rs 16,339 crore as compared with Rs 12,824 crore in the corresponding period last year while excise receipts stood at Rs 16,619 crore as against Rs 15,283 crore. The overall increase in indirect tax collections in this period averaged 17.2 per cent.
In fact, revenue department officials have expressed concern at the initial reports of an economic slowdown since it will affect calculations on the revenue targets for the year.
The latest trade data show that the deceleration in import growth has increased further in August, and is expected to have a lagged impact on customs receipts, they said.
The finance ministry has projected a growth of 25 per cent for customs and 14 per cent for excise. The total collections in the current year are targeted at Rs 44,435 crore under customs and Rs 46,884 crore under excise.
The ministry is perturbed by the sluggish performance under excise, especially since it has recently tightened the modvat scheme to prevent revenue leakages. "We hope to meet the annual targets," officials said.
At the end of July, customs receipts stood at Rs 12,725 crore compared with Rs 10,133 crore in the year-ago period. However, excise collections were marginally higher at Rs 12,776 crore compared with Rs 12,082 at the end of July last year. The combined indirect tax receipts for the period worked out to Rs 25,501 crore. The collections had aggregated Rs 12,570 crore at the end of May.
The buoyancy visible in collections since last year has given way to a deceleration in the current fiscal, with the growth dropping from 47 per cent in April to 30 per cent in May, picking up yet again to 38 per cent in June and then falling to 25 per cent in July.
The quantum of imports have begun to flag from July. The increase dropped to single digit for the first time and then let up further to 5 per cent in August. While this is yet to translate into lower customs receipts, revenue department officials are keeping their fingers crossed.