The finance ministry said that indirect tax collections so far have reached 59.2% of the R6.4-lakh-crore annual target, which is 18.8% higher than what it had collected in 2014-15
Government’s receipts from customs, central excise and service tax rose 35.9% in the April-October period of this fiscal to Rs 3.82 lakh crore on account of robust growth in all the three classes of indirect taxes.
The finance ministry said that indirect tax collections so far have reached 59.2% of the Rs 6.4 lakh crore annual target, which is 18.8% higher than what it had collected in 2014-15.
These collections partly reflect the additional measures taken to boost revenue receipts including the excise increases on diesel and petrol, the increase in clean energy cess, the withdrawal of excise duty relief for motor vehicles, capital goods and consumer durables, and from June 2015, the increase in service tax rates from 12.36% to 14%.
The ministry said that if stripped of all these additional measures, indirect tax collections increased by 11.6% in the April-October period this year compared to the same period a year ago.
“These collections continue to suggest a healthy growth in the underlying tax base,” the ministry stated.
The healthy indirect tax collection comes on the back of a 4.1% growth in industrial production recorded in the April-August period compared to 3% in the same period a year ago.
To spur economic growth, the Reserve Bank of India (RBI) had, in its September monetary policy review, cut the repo rates by a higher-than-expected 50 basis points to 6.75%, bringing it to the lowest in four years. So far this year, RBI has cut the repo rate by 100 basis points.
While central excise collection grew at an impressive 68.6% in the first seven months of this fiscal to Rs 1.47 lakh crore, service tax receipts grew 26.1% to Rs 1.12 lakh crore and customs grew 16.8% to Rs 1.22 lakh crore. Growth so far in indirect tax collections conforms to the projected growth rate.
In the month of October, central excise receipts grew 66.2%, while service tax receipts grew 36.8% and customs collections expanded by 13.1%, the ministry said.