Manufacturers can breathe a sigh of relief as the Central Board of Excise & Customs or CBEC has no plans to hike excise duty on any goods for the time being.
Speaking exclusively to CNBC-TV18, CBEC chairman S Dutt Majumder said, the board plans to wait for the July collection number before taking a call on any sort of an excise hike.
"The July excise data will come in by August 7 or 8," he informed.
Earlier, reports doing the rounds indicated that the Finance Ministry was likely to take a call on revising excise duties on cars and tobacco-related products concerned over the expected shortfall in tax revenues.
"We have not taken any decision to hike central excise on cigarettes," the chairman clarified.
Majumder also clarified that no specific items have been finalised for rate hikes. He said higher excise on goods will have an inflationary impact.
Input prices rose sharply in July, driven by higher raw material costs, causing manufacturers to charge more for their products, the PMI survey showed.
Majumder expects to see an overall indirect tax growth of 30% and a 24.5% growth in central excise for the first quarter of the current fiscal. "The customs collection was up 34% as of June 2011, however, I think there will be a decline from here," he said.
However, with the falling price of the Indian crude basket, concerns have been raised on a possible decline in the customs duty collection. "We will have to make up Rs 37,000 crore hit from customs cut on crude," Majumder stated.
On the positive side, Majumder said, the Q1FY12 service tax collection is up 33.5%. The board plans to tighten the service tax administration and check on tax evaders. There are about 1.5 million registered service tax payers in the country.
"Currently, over nine lakh service tax assesses are not filing returns," Majumder pointed out. He said orders have been given to officials to look into the matter.
Source : www.moneycontrol.com