The country's indirect tax kitty has risen by an impressive 46.2 per cent year-on-year in the first four months of the current fiscal, indicating a revival of economic activity in July after a dip in industrial production growth in June.
The centre mopped up Rs96, 223 crore in indirect taxes in April-July, mainly on customs collections, which shot up over 70 per cent to Rs41,545 crore during the period.
Included in indirect taxes are customs duty levied on imports, excise duty on goods manufactured and service tax. The robust collections signify strong economic activity across all the important manufacturing and services sector.
According to analysts, this is good news especially with the data on advance taxes and the first supplementary demand for grants pointing towards a possible fiscal slippage.
Excise duty collections were also registered a smart 43 per cent rise to Rs38,260 crore in April-July 2010-11, against Rs26,792 crore in the corresponding months last year. Service tax and receipts, however, were up 12 per cent at Rs16,418 crore, compared with Rs14,685 crore in the year-ago period.
Besides the increase the 32 per cent increase in the value of exports and a 34 per cent increase in the value of imports from the country in April-June, finance ministry officials said the growth in tax collections could be attributed to increase in petroleum duty.
In the budget announced in February, the finance minister restored the basic 5 per cent customs duty on crude petroleum, 7.5 per cent on diesel and petrol and 10 per cent on other refined products. The ministry had also enhanced the excise duty on petrol and diesel by Re1 per litre each.
The Manufacturing Purchasing Managers' survey figures for July, was also up albeit marginally rising to 57.6 from 57.3 in June, also suggested an improvement in industrial output in July.