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Higher tax mop up reflects no slowdown post note ban: Jaitley

Tuesday, January 10, 2017

Dismissing slowdown concerns post demonetisation as "anecdotal", Finance Minister Arun Jaitley yesterday said indirect tax collection grew at a decent 14.2% in December buoyed mainly by excise, reflecting an uptick in manufacturing. December, which witnessed currency crunch following the ban on high value notes, saw excise collections grow at 31.6%, while service tax was up by 12.4%. Customs mop up, however, witnessed 6.3% decline mainly on account of dip in gold imports.

For the April-December period of the current fiscal, indirect tax receipts soared 25% to Rs 6.30 lakh crore, which is about 81% of Budget Estimates. Direct tax collection was also up 12.01% at Rs 5.53 lakh crore, 65% of BE. After the shock demonetisation of Rs 500 and Rs 1,000 notes on November 8, critics have voiced concerns of slowdown in industrial activity.

Mop up from excise duty -- a reflection on manufacturing activity -- registered a hefty 43% growth in the nine month period to December. Asked about reports of job losses post demonetisation, Jaitley said: "All these stories and reports are anecdotal. The growth figure does not depend on anecdotal basis... Statistics and taxation figures are real. This is the money which has come in."

Excise collection in December grew 31.6% to about Rs 36,000 crore. Service Tax realisation grew 12.4% to Rs 23,000 crore. Collection of indirect taxes, which comprise excise, service tax and customs, was up 14.2% to about Rs 76,000 crore last month.

Jaitley said the data showed that during the 9-month period while direct tax collection has moved up, indirect tax collection moved up significantly. Tax collection in December 2016 has also moved up compared to December 2015 and November 2015.

When compared with tax collections in November, indirect tax receipts last month were up 12.8%, he said. "Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant," Jaitley said.

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