Increase in indirect tax revenue shows economic growth: Chief Economic Adviser

Source: PIB, Government of India

Chief Economic Adviser: Increase in indirect tax revenue collections during July 2015 and first four months (April-July 2015) of current financial year 2015-16 indicate that the underlying momentum in the economy continues to improve across all sectors; growth of 14.6 % (excluding the additional revenue measures) in collections in first four months suggests a healthy increase in nominal GDP growth which constitutes the tax base for indirect tax collections. The Chief Economic Adviser, Arvind Subramanian, said that increase registered in indirect tax collections during the first four months (April-July 2015) of the current financial year 2015-16 indicate that the underlying momentum in the economy continues to improve across all sectors. He said that the growth in underlying indirect tax collections (excluding the additional revenue measures) of 14.6% for the first four months – one-third of financial year 2016 – suggests a healthy increase in nominal GDP growth which constitutes the tax base for indirect tax collections. The Chief Economic Adviser was responding to the indirect tax collections figures released on Tuesday for the month of July 2015 by the Central Board of Excise and Customs (CBEC). In July 2015, indirect tax collections increased by 39.1% compared with July 2014; cumulatively, in April-July 2015, indirect tax collections increased by 37.6% over the same period last year. These increases were spread across all three tax categories – customs, central excise and service tax. Subramanian further said that these collections reflect in part additional measures taken, including the excise increases on diesel and petrol, the increase in clean energy cess, the withdrawal of exemptions for motor vehicles and consumer durables, and in June 2015, the increase in service tax from 12.36 to 14%; customs duties collections have been aided by the rupee depreciation of 6% between April and July. Stripped of all additional revenue measures, indirect tax collections increased by 15.2% in July 2015 over July 2014; and by 14.6% for April-July 2015 compared to the April-July 2014, he added.  

August 12, 2015 | 4:35pm IST.