Finance Ministry has stated that achieving Rs 6.24 lakh crore indirect tax collection target for current fiscal would remain a challenge as tax collection depend upon the overall revival of the economy and manufacturing sector.
Revenue Secretary Shaktikanta Das has asserted that sluggish recovery in economic growth can impact indirect tax collection. The government has budgeted to collect over Rs 6.24 lakh crore from indirect taxes in the current fiscal, which is 20.28 percent higher over the collection in 2012-13. Shaktikanta Das added that budgeted revenue gains of Rs 7,525 crore in indirect taxes is likely to come in from excise duty hike in cigarettes and pan masala. The government during budget 2014-15 has hiked excise duty on cigarettes in the range of 11 percent to 72 percent. Further, the excise duty on pan masala was increased from 12 percent to 16 percent, on unmanufactured tobacco from 50 percent to 55 percent and on gutkha and chewing tobacco from 60 percent to 70 percent.
On direct tax front, Revenue Secretary has stressed that the target would definitely be achieved. The government has set direct tax collection target at Rs 7.36 lakh crore for FY15, up from over Rs 6.36 lakh crore collected last year.
Over the past two fiscal years, Indian economy is struggling with slowdown and the factors like high interest rates, elevated inflation, low investments and slow execution of infrastructure projects have been impacting economy’s growth. After remaining at sub-5 percent in last two fiscals, Indian economic growth in the current fiscal is estimated to recover to around 5.4-5.9 percent.