Despite softening industrial production for the first quarter of 2011-12, the indirect tax collection for the first quarter April-June 2011 showed robust growth of Rs 96,000 crore, which is 30% more than last year’s Rs 73,626 crore for the same period. On the other hand, the collections from Customs in first quarter have risen by 34% to Rs 38,168 crore as against Rs 28,490 crore last year. This surge in tax collection shows the increase in economic activities of the country.
Collections from excise duties and service tax have also shown robust growth, excise duties increased by 25% to Rs 37,253 crore and service tax rose by 34% to Rs 20,376 crore. The overall growth required to meet the indirect tax budget estimates is 15%. During the first quarter of 2011-12, the gross direct tax collections increased by 24% at Rs 1,04,136 crore against Rs 84,041 crore last year.
With the jump in the indirect tax collection government is hoping to make up for the losses incurred due to the removal of customs and excise duties on crude oil and petroleum product. In June, government had removed 5% custom duty on crude and same on diesel and petrol. The loss estimated by the finance ministry for nine months of this fiscal is pegged at Rs 37,000 crore of which the Central share is likely to be about Rs 23,000 crore.
The jump in tax collection is on the government’s expectations. Earlier, finance minister has expressed his confidence on meeting the budget targets of both direct and indirect tax collection. Finance ministry has also asked the Central Board of Excise and Customs (CBSC) to make up for the revenue loss occurred due to the removal of customs and excise duties on petroleum products through extra collection revenue collection from services sector which contributes 60% of county’s GDP, but has only 20% share in indirect tax collection.
The Directorate General of Central Excise Intelligence (DGCEI), CBEC revenue intelligence arm, has filed cases against some big corporate tax evaders. During first quarter of 2011, the DGCEI has booked 80 cases against many of these big corporate houses and slapped a tax penalty demand of Rs 1,650 crore.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: