‘Pointer to an early economic recovery’.
Customs duty collections in the three months ended June 2009 have surpassed receipts in the January-March period this year, pointing to an early economic recovery, said a senior revenue official.
“There are signs of improvement,” said P C Jha, chairman of the Central Board of Excise and Customs (CBEC), which administers all indirect tax matters, in an exclusive interview to Business Standard.
Customs collections for the April-June 2009 period were about Rs 1,000 crore more than those in the previous quarter (January-March 2009) at Rs 17,858 crore. This is despite the fact that tax rate was higher in first two months of 2009. Customs collections under the countervailing duty were impacted because of reduction in the mean excise duty, which was cut by 2 percentage points after the Interim Budget presented in February 2009.
Jha said tax collection numbers indicate that infrastructure sectors, especially cement and steel, have recovered in the three months ended June 2009.
However, excise duty collections in the April-June 2009 period were still lower than the January-March 2009 receipts. Jha declined to give the exact number.
For the January-March 2009 period, total revenue collection stood at Rs 1,82,910 crore, while excise duty collection was at Rs 31,632 crore. On the other hand, revenue figures for the April-May period stood at Rs 50,991 crore, while excise duty stood at Rs 5,780 for the April-May period this year.
According to Jha, total collection for fiscal 2009-10 would be more than the last year’s figure of Rs 55,000 crore. The department would over-achieve the target of Rs 2,68,000 crore for FY 2009-10, said Jha.
Last year’s collections were hit by the economic slowdown and the government had to slash the duty rates. The central excise rate was brought down to 8 per cent from the original 14 per cent, while the service tax rate was brought down to 10 per cent along with reduction in duty on petroleum products.
Despite these cuts, the collections would be better this year, Jha said, citing the Customs duty numbers.
Jha also said that under the policy of voluntary compliance, more companies were expected to pay taxes. Also, the emphasis would be on audit, anti-evasive and anti-smuggling measures, and under-valuation of goods. Besides, the department is going in for complete automation.
