The government today retained the broad rate structure for all indirect taxes, which will dent its kitty under this head by 16.11 per cent this fiscal compared to projections a year ago.
The government's collection from indirect taxes is pegged at Rs 2.69 lakh crore for this fiscal, a way down from the Rs 3.21 lakh crore Budget estimate for 2008-09.
This is despite the fact that the net of service tax has been expanded, excise duty on some goods like LPG, nylon and yarn raised from 4 per cent to 8 per cent and customs duty imposed on set-top boxes which would give an additional Rs 2,000 crore.
The government realised a low indirect tax revenue at around Rs 2.81 lakh crore in 2008-09 against Budget etimates of Rs 3.21 lakh crore.
Only service tax target of Rs 65,000 crore, pegged in the revised estimates for 2008-09, is retained in the full Budget presented today, which is higher by Rs 540 crore than projected in Budget estimates for the last fiscal.
Both customs duty and excise duty collection targets for the current fiscal are less than projected for last fiscal, both in revised estimates and Budget estimates.
Customs duty collections are projected to be down over 17 per cent at Rs 98,000 crore during the current fiscal against Rs 1,18,930 crore in Budget estimates, and over 9 per cent lower than Rs 1,08,000 crore in revised estimates.
The government is expected to garner 22.77 per cent less revenue from excise duty at Rs 1,06,477 crore this fiscal against Rs 1,37,874 crore in Budget estimates and 1.73 less than Rs 1,08,359 crore in the revised estimates for 2008-09.
It is the excise duty which bore the maximum brunt of stimulus packages. It was cut by 6 per cent to 8 per cent, while service tax was cut by 2 per cent to 10 per cent.
While retaining these duty structures, Finance Minister Pranab Mukherjee increased excise duty on some products by 4 per cent to 8 per cent to bring harmony in the tax structure. However, food items like biscuits, sherbats, cakes and pastries, medical equipment, pressure cookers could continue to attract 4 per cent tax rates.
The Minister also expanded the list of service duty to include services provided by legal consultants, though the individual service provider is exempted. Also, goods carried by railways, coastal cargo or inland waterways will also draw service tax.
Mukherjee also imposed 5 per cent customs duty on set top boxes. He increased customs duty on gold and silver, excluding jewellery.