Growth in collection of indirect taxes in the first seven months of the current fiscal shows robust GDP expansion, Chief Economic Advisor Arvind Subramanian has said.
“Apr-october indirect tax growth: 35.9 per cent. And 11.6 per cent w/o new measures. Latter shows tax base-nominal GDP-growth healthy,” Subramanian tweeted.
Indirect tax collections have registered an increase of almost 36 per cent in the first seven months of the current fiscal at Rs. 3.83 lakh crore on the back of a spurt in economic activity.
“However, stripped of all these additional measures, indirect tax collections increased by 11.6 per cent during April-October 2015 compared to April-October 2014. These collections continue to suggest a healthy growth in the underlying tax base,” the Finance Ministry added.
With this, the Finance Ministry said, it has met 59.2 per cent of indirect tax target for the full fiscal. As per the Budget Estimate 2015-16, the government aims to collect Rs. 6.46 lakh crore from indirect taxes — central excise, Customs and service tax.
“Cumulatively, during April-October 2015, indirect tax collections increased by 35.9 per cent over the collections made during the same period last year while the target growth rate for 2015-16 is 18.8 per cent,” the ministry said.
In October 2015, indirect tax revenue collections rose 36.8 per cent from a year ago.
Collections from central excise jumped to Rs. 1,47,685 crore in April-October 2015, from Rs. 87,588 crore in the year-ago period, registering an increase of 68.6 per cent.
In the case of service tax, collections went up to Rs. 1,12,727 crore, up 26.1 per cent yoy.
Customs duty mop-up too remained on an upward trajectory, which is up 16.8 per cent at Rs. 1.22 lakh crore in the seven months, from Rs. 1.04 lakh crore in the year-ago period.
These collections are partly due to additional measures like the excise increases on diesel and petrol, the increase in clean energy cess, the withdrawal of exemptions for motor vehicles, capital goods and consumer durables and the increase in service tax rates to 14 per cent from 12.36 per cent.