What explains the cut in revised estimates (RE) in customs and excise revenues for FY24 in the Interim Budget?
As far as excise duties are concerned, these are levied on very few items, mainly fuels and crude oil, and may be on tobacco, but the collection is mostly from petroleum products. In May 2022, the duty rate was reduced by ₹8 per litre on petrol, and by ₹6 per litre on diesel. Initially, the collection is less because the rate was cut drastically. Next year, the impact may not be there.
Apart from that, there is special additional excise duty, or windfall tax. It was reduced by 56% last year. That again is dependent on global oil prices, and domestic petrol and diesel rates. Accordingly, the windfall tax rate is calibrated. This year, maybe because of those conditions, it was calibrated at a lower rate. So there is less collection on that count. That has led to a negative (-6%) growth in Union excise duty collection, but in the next financial year, we are expecting a growth of 5%.
On the customs duty front, the merchandise import in India has come down from $548 billion last year to $505 billion in value terms in the first nine months, as per the Department of Commerce. Due to a drastic reduction in commodity prices in the international market maybe the quantity has not come down to that extent and could even remain the same, but in value terms there is a contraction of 8%. So, while India may have benefitted from lower commodity prices, it has impacted customs duty collection, which has grown 2% in the current year. We have taken into account the duty collection on the customs side while fixing the target for the next fiscal.
When we are talking about nominal GDP growth of 10.5%, would you also agree that despite the buoyancy in GST collection, this projection is conservative?
Denne historien er fra February 2024-utgaven av Fortune India.
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Denne historien er fra February 2024-utgaven av Fortune India.
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