Indirect tax collections grew by 7.1% to Rs 3.29 lakh crore during April-November period of current fiscal as compared to Rs 3.07 lakh crore during the same period of previous financial year. Indirect taxes include customs duty, central excise duty and service tax. The 7% growth during the reported period is far lower than 20% annual increase envisaged in Budget 2014-15 and was mainly impacted by decline in excise duty collections, indicating slump in domestic manufacturing activity.
Central excise tax collection declined by 0.2% y-o-y to Rs 1,02,762 crore during the first eight months of current fiscal. However, customs collections rose 10.2% to Rs 1,23,308 crore during April-November FY15 and Service tax collections grew by 11.5% Rs 1,02,592 crore.
However, for November, there was some recovery in the indirect tax collections as the total collections grew 19.4% y-o-y at Rs 44,060 crore. Central excise duty collections were up 10.4% at Rs 14,952 crore and Customs duty rose 30.8% at Rs 17,185 crore in November. Meanwhile, the significant rise in customs duty indicated that imports were high in November as well, which might not allow trade deficit to come down. Service tax collections were up 16.6% at Rs 11,923 crore during the reported month.
Tax collection is the major source of revenue for the government. The Budget aimed to mobilise Rs 6.23 lakh crore in 2014-15, which requires a growth of 20% in indirect tax collections over 2013-14. However, the total indirect tax collections amount for April-November was just 52.7% of the full year budgeted estimate, indicating that almost half of the Budget estimates will have to be collected in the next four months. The government has estimated to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the current fiscal.