The fall in excise collections is attributed to a sharp decline in manufacturing.
Excise and Customs duty collections, which account for more than 75 per cent indirect tax receipts of the government, declined by 8.3 per cent in November 2008.
While excise duty collections fell by 15 per cent, the Customs duty receipts dipped by 1 per cent (for the second consecutive month). Service tax — the third major component of the indirect tax kitty — numbers are reported with a 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 (see table). The fall in excise collections is attributed to a sharp decline in manufacturing because of economic slowdown in the wake of the ongoing global financial crisis.
Direct tax collections for the month under review have declined 36 per cent as companies are not doing well. An across-the-board cut in excise duty by 4 percentage points in December will put the fiscal deficit under further pressure as excise duties account for more than 12 per cent of the total tax kitty.
The 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.
| TAXED BY THE SLOWDOWN | ||||||
| 2007 | 2008 | % Growth | ||||
| Nov | Apr-Nov | Nov | Apr-Nov | Nov# | Apr-Nov | |
| Customs | 9,005 | 66,838 | 8,931 | 75,551 | -0.8 | 13 |
| Excise | 10,065 | 75,013 | 8,556 | 73,878 | -15 | -1.5 |
| Total indirect tax* | 19,070 | 1,41,851 | 17,487 | 1,49,429 | -8.3 | 5.3 |
| Total direct tax | 16,189 | 1,45,053 | 10,346 | 1,77,251 | -36 | 22.2 |
| Total tax* | 35,259 | 2,86,904 | 27,833 | 3,26,680 | -21 | 14 |
| * Service tax collections are not included # YoY Figures in Rs crore | ||||||
Excise duty collections declined to Rs 8,556 crore in November this year, compared with Rs 10,065 crore in the corresponding month last year. Customs duty receipts fell marginally to Rs 8,931 crore as against Rs 9,005 crore in November 2007. However, service tax collections went up by 15.9 per cent to Rs 3,767 crore in the month under review.
Between March and November 2008, Customs and excise collections stood at Rs 75,551 crore (Rs 66,838 crore) and Rs 73,878 crore (Rs 75,013 crore), respectively. Figures in bracket represent corresponding period of the 2007-08 financial year.
