Monday 13 July 2015

Indirect tax collection grew 37.5 percent in the first quarter

Showing a healthy growth, Indirect tax revenues grew 37.5 per cent to nearly Rs 1.54 lakh crore in the first quarter of the current fiscal, powered by a robust show in excise collections. The growth in collections indicates that the underlying momentum in the economy is improving across all sectors including manufacturing as reflected in healthy excise tax collections.

As per the government data, Indirect tax collections in April-June quarter increased to Rs 1,53,980 crore from over Rs 1.12 lakh crore in the year-ago period. In the quarter central excise collections surged by 81 percent to Rs 61,661 crore, from Rs 34,067 crore a year earlier. Customs collections were up 20.2 percent to Rs 47,080 crore, from Rs 39,175 crore in April-June 2014, while Service tax collections went up by 16.4 percent to Rs 45,239 crore in April-June 2015. For the month of June, the overall indirect tax collections surged by 33.3 percent to Rs 57,357 crore. Excise tax was up 67 per cent at Rs 22,717 crore for the month, while Service tax inflows were up 14 percent on year at Rs 17,546 crore and customs collections were up 21 percent at Rs 17,094 crore.

The government has stated that the growth in underlying indirect tax collections of 14.5 per cent suggests a healthy increase in nominal GDP (gross domestic product) growth which constitutes the tax base for indirect tax collections. The indirect tax collections reflect in part the effect of the additional measures taken by the central government, including the excise hike on diesel and petrol, the increase in clean energy cess and withdrawal of exemptions for motor vehicles and consumer durables, besides service tax rate hike to 14 per cent. For the full year the government is targeting Rs 6.46 lakh crore from indirect taxes this financial year, a growth of 18.8 percent compared with previous financial year.

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