Even as prices of many commodities are hovering around five-year lows globally...
Even as prices of many commodities are hovering around five-year lows globally, India’s customs duty collections are unlikely to be affected much as higher imports are expected to make up for the potential loss of revenue due to any dip in the prices, reports Banikinkar Pattanayak in New Delhi. According to the latest commerce ministry data, key items other than gold, which attract customs duties, witnessed higher imports in the April-October period from a year before, as the economy showed some signs — albeit fragile — of a pick-up this fiscal and as traders sought to take advantage of lower prices globally.
Although higher imports may help, these may not be enough to salvage the situation for the government as analysts believe its ambitious targets of a 20.3% rise in indirect tax and 15.3% in customs duty collections for this fiscal may be missed. At 5.9%, the rise in the customs duty mop-up in the last fiscal was the lowest since 2009-10, which helped drive down the overall indirect tax collection growth to a four-year low of just 9.5% in 2013-14.
Already, the collection of indirect taxes grew just 5.6% during the April-October period from a year earlier, while that of customs duty rose 7.5%. Excise duty collections, another important component of indirect taxes, also declined by 1.2% until October this fiscal to Rs 88,330 crore.