Excise Duty Collections Dips 14% In April

14-May-2013

NEW DELHI: Excise duty collections have taken a big knock in the first month of the new fiscal, as companies took credit for higher tax paid in the last month of 2012-13 to help government meet fiscal deficit target for the year. While the overall indirect taxes grew by a meager 4%, excise duty collections bore the biggest brunt of enhanced payments in March 2013, witnessing a sharp fall of 14% in April, 2013. Excise collections came in at only .`9,800 crore as companies rushed to get their accumulated input tax credit.





"It's usually like this when the collections are subdued...Taxpayers claim input tax credit only after the end of fiscal," said a finance ministry official explaining the decline. Whenever there is pressure on tax officials, companies are not allowed to adjust their tax liability against input tax credit, and instead are asked to settle their taxes in cash in the last few months of the financial year.



In 2012-13, there was huge pressure on officials to raise as much tax as possible so that the government could meet its revised fiscal deficit target of 5.3% of GDP.the reason. The government had revised the indirect taxes target to Rs 4.69 lakh crore as against the budget estimates of Rs 5.05 lakh crore as collections had remained subdued due to economic slowdown.



But, it managed to exceed the revised target on the back of an aggressive tax collection drive.



In the revised estimates, the government has shown a deficit of 5.2% of GDP, which may come down to about 5% when final numbers come in, but the aggressive mobilization has depressed revenues for the current year. Most taxpayers show swelled up personal ledger accounts due to this reason.



Duty refunds of exporters had also been put on hold since January onwards, an issue that was flagged by the Commerce department with the department of revenue in the finance ministry.



Tax authorities had turned the heat on taxpayers whose excise duty or service tax payment was lower than previous fiscal and sent out stern letters asking them to explain the reason.

Source:-articles.economictimes.indiatimes.com