Signalling a strong economic recovery even in the wake of partial withdrawal of stimulus measures last fiscal, indirect tax collections in 2010-11 have exceeded the revised estimate of Rs.3.34 lakh crore by a significant margin, having already touched Rs.3.40 lakh crore.
In an interaction with the media on the sidelines of a conference on indirect taxes organised by the Associated Chambers of Commerce and Industry of India, Central Board of Excise and Customs (CBEC) Chairman S. Dutt Majumder indicated that the total mop-up could well be Rs.7,000 crore higher than the revised target set for the fiscal.
“...Over and above the revised estimate, we expect Rs.7,000 crore minimum, it may be more also,'' Mr. Majumder said while noting that the revised target had already been exceeded by Rs.6,000 crore. “I expect more. This does not take into consideration customs collections of March 30 and 31. That should be another Rs.1,000 crore,” he said. Customs collections up to March 29 stood at Rs.1.32 lakh crore.
Speaking at the conference, Mr. Majumder indicated that revenue collections by way of service tax in 2010-11 were in excess of Rs.70,000 crore and equalled non-oil Central excise revenues.
This, he said, marked a 20 per cent growth over service tax collections in the previous fiscal. At present, the services sector accounts for about 55-60 per cent of the country's gross domestic product (GDP) as compared to the manufacturing sector's share of 16 per cent.
The government plans to increase the share of manufacturing to 25 per cent of the GDP in the next ten years.
Mr. Majumder said that in 1994, only three services were in the tax net.
Now, a total of 119 services are being taxed. “This shows a robust growth and increasing contribution of the services sector in the national economy,” he said while pointing out that Cenvat credit rules were being simplified to avoid litigations, integrating goods and services, and to usher major tax reforms in the coming years.
At the conference, CBEC Joint Secretary V. K. Garg noted that while harmonisation of Central excise and State tax provisions would lead to a predictable tax environment, it would also facilitate exports with speedy refunds of service tax paid on input services. Small-scale units would benefit with no audit for those with annual turnover up to Rs.60 lakh, he said.
