Excise revenue growth has fallen short of the 10.2% target set by the
finance ministry. The growth in excise revenue, which stood at 7.5%
during the first eight months of the current fiscal, has remained
sluggish mainly on account of poor growth in petroleum products.
Excise collection during April-November 2007 stood at Rs 75,013 crore against the total budget estimates of Rs 1,29,043 crore for 2007-08.
While the non-petroleum, oil and lubricant (POL) segments grew by 12.8% up to September, POL revenues were lagging behind with a growth of mere 1.5% during this period. Within the POL sector, motor spirit and high-speed diesel — petrol and diesel in common parlance — contributed 75% of the total POL revenue.
Lower excise duty collections on petrol and diesel have mainly been on account of reduction in ad valorem duty rates and slashing of retail prices. While the ad valorem component of excise duty was cut from 8% to 6%, retail prices were cut back by Rs 4 per litre and Rs 2 per litre for petrol and diesel, respectively. The other factor leading to lower excise revenues was a 23% decline in sales of petrol and diesel by private players. Substitution of some domestic production by imports also led to the reduction in excise collection, even though it boosted Customs collections. In one case, it was found that excise revenue fell short by Rs 500 crore since HPCL imported diesel as domestic sources could not meet the supply. The transaction resulted in Rs 500 crore gain for Customs revenue.
“Sluggish growth in excise from petroleum is a cause for concern since this segment accounts for nearly half of all excise revenue,” a source said. Such is the extent of worry that an inter-ministerial meeting was convened recently to discuss the slack growth in excise from petroleum sector.
The assessable value of motor spirit, which was higher in April 2007 vis-à-vis April 2006, has fallen significantly during the May-first fortnight of September period.
In case of high-speed diesel, the assessable value has been lower than the previous year consistently since April to September. The assessable value is fixed on the basis of trade parity price which is calculated by giving 80% weightage to imports and 20% to exports for inter oil marketing company sales.
Any encounter with the Income Tax Department is usually dealt with stress and panic. The notice from the Income Tax Department becomes nerve-racking because most of the people More
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