Indirect tax collections grow 36.5% to Rs 2.63 lakh crore

Indirect tax collections rose 36.5% in April-August to over Rs 2.63 lakh crore, suggesting that the underlying momentum in the economy is strong, the Finance Ministry said today.

"The GDP and indirect tax numbers seem to suggest that directionally economy is recovering," Chief Economic Advisor Arvind Subramanian told reporters here.

At the end of April-August, excise duty collections stood at over Rs 1.02 lakh crore, Customs at Rs 85,138 crore and service tax at Rs 75,006 crore.

"When tax collections are growing at over double digits, it suggests that the underlying tax base or the nominal GDP seems to be healthy and moving upwards," Subramanian said.

The indirect tax collection reflects hike in excise duty on diesel and petrol, withdrawal of exemptions for motor vehicles, increase in clean energy cess and the hike in service tax rate in June.

Subramanian said that stripped of all these measures, the April-August tax collection grew at 12.2%, which "continues to suggest a healthy growth in the underlying tax base".

Asked if the government would surpass the indirect tax collection target set in the Budget, he said: "So far, it seems like. Because the asking rate is 18.8%, and we are doing 36.5%."

The government has budgeted to collect over Rs 6.47 lakh crore from indirect taxes in the current fiscal.