The Hindu Business Line : Working group to study excise revenue performance

Faced with a meagre 2.1 per cent growth in excise duty collections in July this year, the Central Board of Excise and Customs (CBEC) has set up an internal working group to study the pattern of excise revenues and analyse as to why excise revenue performance has been slipping in recent months.

The 2.1 per cent annual growth in July was the lowest so far, this fiscal and came in the backdrop of 11.7 per cent manufacturing sector growth recorded in the first quarter of the current fiscal.

The Centre’s excise duty collections had recorded 5.5 per cent increase during April-July 2007 to Rs 34,571 crore compared with Rs 32,753 crore collected in the corresponding period last year.

In July 2007, excise revenues stood at Rs 9,388 crore, which represents 2.1 per cent increase to the collection level of Rs 9,193 crore in the corresponding month last year.

Official sources said that no specific timeline has been prescribed for the working group to submit its report to the CBEC top brass.

Preliminary analysis within the revenue department has shown that there was negative growth in excise duty collections in the petroleum, oil and lubricant (POL) segment and that this could be one factor behind the meagre growth in excise collections in July.

“While there is loss of revenue on the POL segment, the non-POL segment revenues appears to be fine,” sources said.

The working group has been empowered to call for reports from the commissionerates.

‘High impact’ audit

The Union Finance Minister, Mr P. Chidambaram, had recently stated that there was high degree of excise duty evasion in certain sectors and indicated that the revenue department would give more thrust to “high impact” excise audit this fiscal.

He had also said that excise collections should normally mirror the growth trend in VAT and asked the State governments to share information on State-level VAT collections with the revenue department to help identify cases of excise duty evasion.

For fiscal 2007-08, the Centre has pegged the excise duty collections target at Rs 1,30,220 crore. This represents a 9.43 per cent increase over the budget estimate of Rs 1,19,000 crore set for 2006-07.

The actual excise duty collections in 2006-07 was a shade lower at Rs 1,17, 266 crore.