Indirect tax collection of the government for the first seven months of this financial year (April-October) was up 42% to Rs 1.80 lakh crore, an indication that the industrial growth in the country might gather steam in the coming months. “Total revenue collections from the indirect taxes at all India level during April-October stood at Rs 1,80,261 crore, which is 57.5% of the budget estimates of 2010-11,” the finance ministry said on Tuesday.
Revenue collections from Customs jumped 65.9% to Rs 75,349 crore as against the corresponding period last year. Central excise collections rose to Rs 71,078 crore in April-October 2010, an increase of 36.2%. The high tax collections from excise and customs show that the industry is on expansion mode and abysmally low figure in August and September may well prove to be an aberration.
Industrial growth plunged to a 16-month low of 4.4%in September while in in August it had expanded by 6.92%. Chief economic advisor Kaushik Basu also on Tuesday exuded confidence that industry would gather steam from next month.
“The (IIP) data that you will get on December 12 (for October) should see a reasonably good recovery,” Basu said. The services sector–service tax—for the period was Rs 33,833 crore up by 16.9%.
The government has set a budget target of Rs 4.3 lakh crore for indirect tax kitty—customs, excise and services—for this financial year. Combined target for both direct and indirect tax collection for the year is Rs 7.45 lakh crore. The government has been hopeful that it would surpass tax collection target of Rs 7.45 lakh crore.
Tax mop up last fiscal fell short of the target of Rs 6.41 lakh crore, hit by stimulus packages, that included tax cuts, given to spur up the economy impacted by the global financial meltdown.