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Indirect tax collection jumped 37.3 per cent in May, leading to a 39.2 per cent rise in the first two months of the current financial year over a year before.
Revealing this, Finance Minister Arun Jaitley said excise duty collections showed a smart rise, reflecting a pick-up in manufacturing.
The collection of indirect taxes in all three categories — customs, central excise and service tax — has shown a rising trend in these two months, he said.
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Nonetheless, a 39 per cent increase in the collections in the first two months would help the Centre contain its fiscal deficit at 3.9 per cent of the country’s gross domestic product in the current financial year.
Nonetheless, a 39 per cent increase in the collections in the first two months would help the Centre contain its fiscal deficit at 3.9 per cent of the country’s gross domestic product in the current financial year.
It appears the sharp surge in April was largely due to a 100-plus per cent rise in excise duty collection, fuelled mainly by the increase in rates on petroleum. And, the good indirect collections for May was on account of the additional cess on diesel and petrol, as well as the clean energy cess.
“Even if the impact of this additional sector is excluded, in May the increase would be 16.9 per cent and cumulatively the increase would be 12.6 per cent for the two months,” Jaitley said.
Calling a 16.9 per cent growth after removing collections via cess a ‘fairly healthy growth’, he stated that as the growth was spread over sectors, it indicated a pick-up in manufacturing, particularly as excise collections had moved up.
Asked if the increase in excise collection would be reflected in growth in factory production, he said, “Revenue is one indication. That’s (Index of Industrial Production) another indication. We have to add up all this. Since it is a pattern which has continued for two months, it at least gives some green shoots (of growth).”
Index of Industrial Production data for April will be out on Friday.
On his meeting with farmer bodies on the amendments the government has sought to the Land Acquisition Act of 2013, Jaitley said he’d explained the provisions. Also, the farmer bodies gave suggestions.
“There is very little difference between the government’s approach and their approach. So, I will send their suggestions to the minister concerned and I will talk to him,” he added.
