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.