The Finance Ministry said the spurt in indirect tax collections this fiscal was an indication of economic recovery though there was some need for caution as these were only early indications on Thursday.
“If you look at 12.6 per cent increase in April-May indirect tax revenues. The revenue growth is healthy, and all things taken into effect, it should reflect a kind of underlying recovery in economy,” Chief Economic Advisor Arvind Subramanian said.
Indirect tax collections during the first two months (April-May) of the current financial year increased to Rs 96,128 crore, up 39.2 per cent over the year ago period. The collection figures reflect in part the effect of the additional measures taken by the Central Government including increase in excise duty on diesel and petrol, hike in clean energy cess, and withdrawal of exemptions for motor vehicles and consumer durables.
After taking-out the impact of these additional measures, indirect tax collections have shown an increase of 12.6 per cent for the two-month period April-May 2015.
Subramanian, however, cautioned saying one should be careful and appropriately cautious because these are only the collection figures of two months.
“To some extent these numbers are going to be high because of base effect, corresponding collections last year were somewhat down. That too is a caveat (which) needs to be noted,” he said, adding the effect of a higher base could kick in about June-July.