Indirect tax mop-up rises 33% in May

Centre’s indirect tax mop-up rose by 33% in May likely led by high excise collections, signaling a pick-up in economic activity. A part of the collections was on account of additional revenue measures announced in the current year, Revenue Secretary Hasmukh Adhia had tweeted on Thursday.

Indirect tax collections rose by about 37% during April-May compared to the same period of the last fiscal.

The growth rate for the two months without the additional revenue measures including the excise duty hike stood at 14%.

"The indirect tax growth rate for the first two months of current FY is 36.7% with additional revenue measures (ARM) and 14% without ARM," Revenue Secretary Hasmukh Adhia tweeted.

 

Indirect tax revenue include collections from excise, customs and service tax. The indirect tax mop-up stood at Rs 1.31 lakh crore up to May this fiscal, which is 16.8% of Rs 7.78 lakh crore estimated in the budget.

Finance Minister Arun Jaitley has pegged indirect tax collection target at Rs 7.78 lakh crore in 2016-17, up 9.7% from Rs 7.09 lakh crore actual collections of the previous fiscal.

In addition to the 0.5% Swachh Bharat Cess on all services, a Krishi Kalyan Cess at 0.5% came into effect from June 1, 2016.

In a bid to reduce litigation, the central board of excise and customs has identified about 7,300 indirect tax cases it plans to withdraw from High Court and Customs, Excise and Service Tax Appellate Tribunal (CESTAT), as they are under the revised threshold limit.

The government had also rationalised customs duty and excise duty in the budget to promote the Make in India initiative.