With sluggish industrial growth and dampened investment
environment, this Budget is unlikely to raise standard rate of excise duty.
However, there could be some tinkering in rate for specific sectors.
“There is no doubt that there is tremendous pressure on the
Finance Minister to bring the pre-crisis level of standard rate of excise as a
part of fiscal consolidation. But we need to understand the overall investment
and industrial growth situation. That is why the consideration is not to raise
the standard rate,†said a senior Government official.
Indirect tax
collection in April-January (in Rs Crore)
Duty Budget Target Collection
Custom Duty
1,86,694
1,34,802
Excise Duty 1,94,350 1,38,654
Service Tax 1,24,000 1,02,322
Total 5,05,044 3,45,778
Last year while presenting the Budget, then Finance Minister
Pranab Mukherjee raised the standard rate to 12% from 10%. Now, on October 29,
Finance Minister P. Chidambaram announced the roadmap for fiscal consolidation
where he kept the fiscal deficit target for 2013-14 at 4.8 per cent. Since
then, there has been a lot of speculation about raising the duty. However, with
negative industrial growth (-0.6 per cent) in December, the Finance Ministry is
unlikely to take a chance.
Maintaining the status quo on standard excise duty will not
just give relief to the industry, but will also benefit consumers’ demand. Raising
the standard duty will not generate additional revenue as environment is not
conducive, on the other side, it may bring down the overall collection.
The Revenue Department is already having a tough time
meeting the targets of custom and excise duty collection this fiscal. The difference
between the targeted & actual tax collection in show in the above table. It
is estimated that indirect tax collection might see an overall shortfall of
around Rs 30,000 crore.
Sourced
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