It is now clear: there is a slowdown in manufacturing and it has brought down excise duty collection by over 8 per cent in September.
Industry grew by just 3.3 per cent in July and is expected to touch 4.8 per cent in August.
Customs duty collection has grown but only in proportion to the depreciation of the rupee.
The rupee depreciated by nearly seven per cent in September. On the other hand, customs duty grew by seven per cent.
Now the board is eagerly waiting for industrial growth data for August which will be released on Wednesday.
Mr S. Dutt Majumdar, Chairman, CBEC, told Business Line , “There is clear evidence that manufacturing has slowed down. Though, customs duty collection grew, but only in the proportion of the depreciation of rupee.” It means that there is no net gain in terms of customs duty collection, he added.
Usually August-September are bad months for collection of duties, and collections start picking up from October with the festive season gaining momentum.
The only saving grace is service tax. It has been growing consistently and has helped overall indirect tax collections during the first six months of 2011-12, Mr Majumdar said.
The Finance Ministry has set up a target of nearly Rs 4 lakh crore for the indirect taxes. This needs a growth rate of 15 per cent. “For the first six months the growth rate has been nearly 20 per cent and that is a good sign,” Mr Majumdar added.
“I am still optimistic. Manufacturing is expected to do well from October. Therefore, I am hopeful of achieving the indirect tax target in 2011-12,” Mr Majumdar said.