Excise and customs duty collections, which account for more than 75 per cent of indirect tax receipts for the government, have declined by 8.3 per cent in November 2008.
While excise duty - a tax on goods produced - collections fell by 15 per cent, the customs duty receipts dipped by 1 per cent in November 2008 for the second consecutive month. Service tax, which is the third major component of indirect tax kitty, numbers are reported with a further lag of one-month.
With excise duty receipts declining for the third consecutive month, the year-to-date collections till November 2008 fell by 1.5 per cent. The fall in excise collections is attributed to sharp decline in manufacturing activities because of economic slowdown in the wake of global financial crisis.
Direct tax collections have also declined by 36 per cent in the month of November this year as companies are not doing well.
With across the board cut in excise duty by 4 per cent announced in December, the fiscal deficit would be under further pressure as excise duties constitute more than 12 per cent of total tax kitty.
Excise, customs and service tax sops announced by the government since April this year would result in a loss of over Rs 40,000 crore tax revenue in the current fiscal. This would make it difficult for the government to achieve the indirect tax collection target of Rs 3,20,000 crore for the current financial year, an annual growth of 14 per cent.
Excise duty collections declined to Rs 8,556 crore in November 2008 as compared to Rs 10,065 crore in the corresponding month last year. Customs duty receipts fell marginally to Rs 8,931 crore as compared to Rs 9,005 crore in November 2007. However, service tax collections went up by 15.9 per cent to Rs 3,767 crore in November 2008.
In the period of March-November 2008, customs duty collections stood at Rs 75,551 crore as compared to Rs 66,838 crore in the same period last year, while excise duty collections were at Rs 73,878 crore as against Rs 75,013 crore in corresponding period of last fiscal.
