The Hindu Business Line : Excise collections take a hit

The Finance Secretary, Mr D. C. Gupta, the Expenditure Secretary, Mr D. Swarup, and the Revenue Secretary, Ms Vineeta Rai, at the post-Interim Budget press conference in the Capital on Tuesday. — Kamal Narang

New Delhi , Feb. 3

THE buoyancy in overall tax collections notwithstanding, the Centre's revenues from excise have taken a hit, with the revised estimates for 2003-04 falling short of the budgeted target of Rs 96,791 crore by Rs 4,412 crore.

The Chairman of the Central Board of Excise and Customs (CBEC), Mr A.K. Singh, told newspersons that the shortfall was mainly on account of the petroleum sector. "We had budgeted a growth of 24 per cent in excise collections from this sector, which contributes 45-46 per cent of total excise revenues. But the actual growth rate has been only 10.76 per cent, translating into lower revenues of around Rs 4,000 crore," he said.

Besides lower collections from petroleum, the Centre also lost about Rs 300 crore on account of excise exemptions given to the Delhi Metro Rail Corporation, Rs 100 crore due to concessions on edible oil and vanaspati and another Rs 310 crore to the North-East and other area-based exemptions.

The revenues have also fallen short of target in the case of personal income tax (Rs 40,269 crore versus Rs 44,070 crore), even as customs collections are expected to meet the budget estimate of Rs 49,350 crore.

But all these have been more than offset by the huge jump in corporation tax collections, which have exceeded the budget estimate of Rs 51,499 crore by Rs 11,487 crore. As a result, the Centre's gross tax revenue of Rs 254,923 crore as per revised estimates have ended up almost Rs 3,400 higher than the budget estimate of Rs 254,923 crore for the current fiscal.

"This is the first time in several years that the Government has not just met, but actually exceeded its budgeted tax revenue mobilisation target," the Finance Secretary, Mr D.C. Gupta pointed out.

The Chief Economic Advisor to the Finance Ministry, Dr Ashok Lahiri, attributed the contradictory movement in excise and corporation tax collections to the fact that "there is no one-to-one relationship between excise collections and the Index of Industrial Production (IIP)". He noted that unlike the virtually single flat rate for corporation tax, the excise duties varied across sectors and therefore, the buoyancy in IIP need to result in higher excise collections.

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