Finance Minister P Chidambaram today expressed optimism that indirect tax collections would exceed the Budget target of over Rs 2,79,000 crore for the current fiscal (2007-08), even though excise duty collection growth was a matter of concern. Speaking at an investiture ceremony of Presidential appreciation certificates for officers of the Central Excise, Customs and Narcotics departments here, he said, “I am confident that the Budget targets (for indirect tax collections) would be exceeded this year too.”The finance minister, who will be presenting his seventh Budget in Parliament on Friday, observed that indirect tax collections had exceeded Budget targets by Rs 8,615 crore in fiscal 2005-06, while in 2006-07 they had surpassed the targets by Rs 11,300 crore. Accordingly, the departments concerned were given Rs 86 crore and Rs 113 crore for these two years to provide better service conditions to their officials, as part of the scheme to give 1 per cent of excess collections for this purpose.Expressing confidence that indirect tax collections would surpass the Budget targets this year as well, Chidambaram said that this would enable the government to give 1 per cent excess collection to the departments concerned. However, Central Board of Excise and Customs (CBEC) chairman S K Shingal pointed out that the growth rate of excise duty collections is a matter of concern. Excise duty collections are growing at a rate of 7.6 per cent, he noted.Excise duty collections have been growing at a sluggish pace. In the last fiscal, the revised target for excise duty collections was lowered to Rs 1,17,266 crore from the Budget target of Rs 1,19,000 crore.This fiscal, excise duty collections were expected to grow to Rs 1,30,220 crore as per the Budget target, which would be 9.42 per cent growth compared to the Budget target of last fiscal and 11.04 per cent growth over the revised target. According to the Controller General of Accounts figures, net excise duty collections rose at a sluggish pace of over 5 per cent to Rs 75,485 crore till December this fiscal, against Rs 71,816 crore in the corresponding period last fiscal.Net customs duty collections, however, have grown to Rs 74,455 crore till December this fiscal, up around 17 per cent against Rs 63,655 crore in the corresponding period of 2006-07. Overall, indirect tax collections, including service tax, are targeted to rise to Rs 2,79,190 crore in Budget 2007-08, approximately 51 per cent of the total tax revenue.However, Central Board of Direct Taxes officials claim that direct tax collections would exceed Rs 3 lakh crore this fiscal and would exceed indirect tax collections for the first time in history.This will be the Manmohan Singh government’s last full-fledged Budget before the general elections and Chidambaram has the tough exercise on hand of balancing conflicting interests in coming out with a Budget for the aam aadmi (common man).Personal and corporate income tax cuts, excise duty relief and overall simplification of taxes are expected.
