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Petroleum products are the only category that showed a growth in excise duty collections during FY14, on a year-on-year. These products comprised 53 per cent of the total excise duty mop-up in the year, the Comptroller and Auditor General of India (CAG) said on Tuesday.
The other industrial categories such as iron & steel, cement, motor vehicles, and chemical products showed a contraction, CAG said in its report on indirect taxes tabled in Parliament.
Meanwhile, the government has been foregoing more than it has been earning from excise duty due to lower rates for public interest for the five years till 2013-14. However, the percentage of revenue foregone as a percentage of total excise duty collections has come down over the years.
The CAG also said the arrears towards central excise have been rising since 2011-12.
Excise duty collections from petroleum products showed a 4.6 per cent increase at Rs 88,065 crore in FY14 against Rs 84,188 crore a year ago, the report noted.
On the other hand, iron & steel yielded 1.5 per cent less receipts from excise duty collections at Rs 17,342 crore in 2013-14 against Rs 17,603 crore in 2012-13. Similarly, excise duty collections from tobacco products were Rs 16,050 crore in FY14 — 10.8 per cent less than Rs 17,991 crore in FY13, it said.
Cement delivered Rs 10,308 crore under excise head in 2013-14, which represents a fall of 3.8 per cent over Rs 10,712 crore a year ago.
Excise duty collections from motor vehicles witnessed a hefty 16.7 per cent decline at Rs 8,363 crore in 2013-14 against Rs 10,038 crore in 2012-13. Part of it could be because of excise duty concessions given by the interim Budget in February 2014.
All this led to a four per cent fall in excise duty collections from Rs 1.75 lakh crore in 2012-13 to Rs 1.69 lakh crore in 2013-14.
Meanwhile, the Centre has been forgoing more revenues from excise duty than its collections due to lower tariff for public interest. The government has powers under Section 5A(1) of the Central Excise Act, 1944 to issue exemption notifications in public interest to prescribe duty rates lower than the tariff rates prescribed in the schedules.
In 2009-10, the revenue forgone was Rs 1.69 lakh crore, which was 164.21 per cent of Rs 1.03 lakh crore collected under the excise duty. The trend has been persistent since then, but the proportion of revenue foregone to revenue collected has declined. For example, it stood at 119.39 per cent in 2012-13 and 115.48 per cent in 2013-14.
Meanwhile, the arrears of excise duty were Rs 35,964 crore during 2011-12. This rose to Rs 45,463 crore at the end of 2012-13 and further to Rs 59,309 crore in 2013-14, the CAG said.
During FY14, the tax department could realise only Rs 1,178 crore of arrears in Central excise. This is 2.59 per cent of the arrears at the commencement of the year, which stood at Rs 45,463 crore.
“The collection during 2013-14 has fallen drastically to 2.59 per cent, compared to 4.34 per cent in 2012-13.
“There is a need to strengthen the recovery mechanism of the department,” the CAG report said.
