The grim economic situation was mirrored in the indirect tax collections that showed modest growth during the first quarter of the current fiscal.
Contracting industrial output adversely impacted excise duty collection, which inched up 0.9 per cent in June while for the first quarter, the excise duty collection was up by 4.9 per cent.
Overall, the indirect tax collections comprising service tax, customs duty and central excise inched up 4.7 per cent during the first quarter of the current fiscal.
Excise duty collection for June stood at Rs 13,980 crore as compared to Rs 13,849 crore in June 2012-13 while for the quarter April-June, the collection from excise ó levied on manufactured goods ó contracted to Rs 37,625 crore as against Rs 39,575 crore during the same period a year ago.
The asking rate of growth for excise duty this year is 11.8 per cent to achieve the Budget target.
The poor show by the excise duty is a result of continued weakness in industrial production, which shrank 1.6 per cent in May and grew just 1.8 per cent in April, due to high borrowing cost, decline in demand and stalled investments.
The manufacturing sector, which has a weight of more than 74 per cent, has been the worst-hit. Further, a 3 per cent hike on SUVs from 27 per cent to 30 per cent in Budget 2013-14 has also impacted the excise collection. According to data from the automakersí body Siam, Mahindra & Mahindra posted 17.17 per cent decline in its utility vehicle sales at 15,916 units from 19,348 units in June last year.
The overall indirect tax collection stood at Rs 39,550 crore, up 6.7 per cent, in June while it stood at Rs 1,10,929 crore during the April-June quarter.
The collection from customs duty also was moderate given the steps taken by the government and the RBI to stem the import of gold into the country. Customs duty collection grew by 6.1 per cent at Rs 13,494 crore as against Rs 12,715 crore in June 2012-13.
In June imports declined marginally by 0.37 per cent to $36 billion, mainly on account of decline in import of the yellow metal. The import of gold fell to $2.45 billion in June as against $8.4 billion in May.
For the April-June quarter, customs duty collection stood at Rs 40,796 crore, up 6.9 per cent from Rs 38,175 crore posted last year during the same