Indirect tax collection up 35.8%

Indirect tax collection was up 35.8 per cent to ~3.24 lakh crore in the first half of the current financial year, reflecting growth in economic activity. Collection in the year-ago period was ~2.38 lakh crore. The growth rate in collection during the first half of 2015-16 is double the Budget estimate of 18.8 per cent for the full financial year.

Signalling faster economic growth, the Centre’s indirect tax collections rose 35.8 per cent in the first half (April September)of 2015-16.

This was mainly due to additional revenue measures announced this year, showed data issued by the ministry of finance on Friday. The collections were ~3.24 lakh crore in these six months, from ~2.38 lakh crore in the corresponding period of last year.

The year’s Union Budget had estimated no more than a 19 per cent rise in indirect taxes. Service tax, excise duty and customs are major components.

Part of the rise was due to measures such as the excise increases on diesel and petrol, increase in clean energy cess, withdrawal of exemptions for motor vehicles, capital goods and consumer durables, and, from June, increase in service tax from 12.36 to 14 per cent.

September’s collection was up 32.6 per cent over a year before, at ~61,284 crore.

The bulk of the growth was from excise duty collection, up 69.6 per cent in the period, at ~1.25 lakh crore as against ~74,019 crore in the same period of 2014. Customs revenue grew 17.5 per cent to ~1.03 lakh crore in the six months. And, service tax revenue expanded 24.3 per cent to ~95,493 crore.

A bulk of the growth has been contributed by excise duty