The government’s indirect tax revenue grew 36.8 per cent in October 2016 when compared with the revenue in the same month previous year.Of these, excise duty collections grew the fastest compared with service tax and customs duty collections. However, this does not necessarily imply a recovery in manufacturing, an analysis of the sources of tax revenue shows.“Collections on account of Central Excise increased from Rs.87,588 crore in April-October 2014 to Rs.1,47,685 crore in April-October 2015 and thereby registering an increase of 68.6 per cent,??? the government said in a release on Monday.A deeper look into the excise numbers shows that an overwhelming proportion of excise collections are coming from petroleum and tobacco products, not strictly manufacturing itself.

Together, these two categories accounted for 80 per cent (Actual) of the entire year’s excise duty collections in financial year 2013-14. The various duties on petroleum and tobacco products accounted for 79 per cent (Revised Estimates) of the excise collections in 2014-15. Two categories are projected to make up around 82 per cent of excise collections this fiscal.Till October 2016, this financial year has seen cumulative indirect tax revenues grow 35.9 per cent over the same period last year.The government has taken steps to increase indirect tax collections, and some of these have to do with increases in excise duties on petrol, diesel, and tobacco.

However, even without these the collections from petroleum and tobacco would have still growth healthily.“Stripped of all these additional measures, indirect tax collections increased by 11.6 per cent during April-October 2015 as compared to April-October 2014. These collections continue to suggest a healthy growth in the underlying tax base,??? the government release said.Service tax collections increased 26 per cent, from Rs.89,379 crore in April-October 2014 to Rs.1,12,727 crore in April-October 2015. Customs collections grew 16.8 per cent in the same period.

Courtesy : http://www.thehindu.com