In the 10 months from April to January, while excise collections grew only 5.3% to `1.43 trillion, custom duty collections rose 8.7% to Rs1.5 trillion and service tax revenues gained 8.3% to Rs1.3 trillion. Photo: Pradeep Gaur/Mint
In the 10 months from April to January, while excise collections grew only 5.3% to `1.43 trillion, custom duty collections rose 8.7% to Rs1.5 trillion and service tax revenues gained 8.3% to Rs1.3 trillion. Photo: Pradeep Gaur/Mint

Govt needs Rs2 trillion more in indirect taxes to meet budget estimates

In April-January period, tax department collected Rs4.27 trillion, an increase of 7.4% from a year ago, but substantially short of the annual Rs6.23 trillion target

New Delhi: With just two months to go for the fiscal year to end, the central board of excise and customs will have to collect almost 2 trillion in indirect taxes to meet the budgeted tax collections, illustrating the challenge faced by finance minister Arun Jaitley to meet the fiscal deficit target of 4.1% of gross domestic product.

In the April-January period, the tax department collected 4.27 trillion, an increase of 7.4% from a year ago, but substantially short of the annual target of 6.23 trillion. The government is hoping the successive increase in excise duty on petrol and diesel in the past couple of months will help narrow the gap in tax collections. A slowing economy had impacted excise duty collections, making it difficult for the government to meet projections.

While excise duty collections have touched 68.3% of projections, customs duty collections were at 77% of the target and service tax lagged at 61.3%, mainly on account of an aggressive service tax collection target.

In the 10-month period, while excise collections grew only 5.3% to 1.43 trillion, custom duty collections rose 8.7% to 1.5 trillion and service tax revenues gained 8.3% to 1.3 trillion, the finance ministry said in a statement. In January, while growth in customs collections was flat, excise duty collections rose 35% because of three increases in excise duty on petrol and diesel. Service tax collections rose 6.3% in the month.

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