Indirect tax collections fall short of budget estimates

India’s indirect tax collections fell short of the revised budget estimates in 2013-14 by more than ₹ 17,000 crore.

The government raised ₹ 5 trillion in indirect taxes, which include excise, customs and service taxes, in the year ended 31 March, less than the revised estimate of ₹ 5.17 trillion, according to government data.

To be sure, these are provisional figures and the final numbers will be released at the end of the month.

In the interim budget presented in February, finance minister P. Chidambaram had cut the indirect tax collections target for last fiscal from ₹ 5.65 trillion.

The shortfall in tax collections may widen the fiscal deficit even though the finance ministry had indicated that the government is expected to make savings from reduced expenditure. The government hopes to curb the fiscal deficit to 4.6% of gross domestic product.

Earlier this month, figures released by the income tax department showed that the central board of direct taxes had managed to meet its revised target of ₹ 6.36 trillion. The initial budget estimate was ₹ 6.68 trillion.

In an interview to CNBC TV18, J.M. Shanti Sundaram, chairperson of Central Board of Excise and Customs, said the slowdown in the manufacturing sector had affected collection.