New Delhi, June 4 (ANI): Finance Minister Pranab Mukherjee on Monday asked the Central Board of Excise and Customs (CBEC) officials to make their best efforts to mobilise resources to meet the targets of indirect tax collections for 2012-13.
"The target for indirect tax collections in 2012-13 has been placed at Rs.4, 99,694 crore. It is a growth of over 27 per cent. This target has been fixed keeping in view the increase in central excise and service rate from 10 to 12 per cent the observed buoyancy in service tax collections. I am confident that the department would leave no stone unturned in ensuring that the targets for the current year are not only met, but handsomely exceeded," said Mukherjee, while speaking at the at the Annual Conference of Chief Commissioners and Directors General of Customs, Central Excise and Service Tax here today.
Asserting that a strong indirect tax administration is fundamental to the development of a nation's economy, Mukherjee said: " Government's fiscal measure, by way of reduced rates of excise and customs duties, significantly dented revenue collections in the recent past. It was an unavoidable necessity to steer the economy out of the economic slowdown. The Indian economy registered a healthy growth of 8.4 per cent in 2009-10 and 2010-11. However, renewed global uncertainty, emanating mostly from the Euro zone area affected domestic business sentiments in 2011-12."
"A tight monetary policy directed at taming inflationary pressures in the economy also came in the way of consolidating this recovery. GDP growth in 2011-12 has slowed significantly to just 6.5 per cent. This has been disappointing. Like for most parts of the world, the second round of global uncertainty and the slowdown has come rather quickly on the heels of the previous one, with practically no headroom for running a proactive fiscal policy," he added.
Mukherjee pointed out that there were some positives expects in the Indian economy ahead.
"The interest rate cycle has been reversed; mining sector growth has turned around, progress has been made on fuel linkage for coal based power projects; there is a turnaround in the quarterly investment growth rate, which had been negative in the preceding quarters of 2011-12; a normal south west monsoon has been predicted for 2012-13 and there has been a rapid decline in international oil prices in recent weeks," said Mukherjee.
"Further, there are no major adverse results on corporate performance in the last quarter of 2011-12. All these factors should help in the recovery of domestic growth momentum," he added.
Stating that the challenges before the CBEC today are multi-faceted, Mukherjee said: " At a general level, there is an urgent need to reverse the declining trend in tax- GDP ratio by augmenting tax collections. This ratio was nearly 12 per cent in 2007-08, but has dropped to around 10.5 percent in 2011-12."
"There is scope for improving tax administration by leveraging technology and facilitating a congenial public interface, where required, through appropriate training and capacity building," he added.
Mukherjee further urged the CBEC members to put in their best efforts to augment the tax collections and remain firmly committed to providing an efficient, responsive and tax payer friendly administration.
"I understand that CBEC has constituted four Breakaway Groups for in depth examination of some of the current issues that need the immediate attention of the department. I expect each one of you to contribute actively to the deliberations, brainstorm collectively to find out solutions to the problems thrown up by these groups and draw road maps for future course of action," said Mukherjee.
Mukherjee said smuggling of FICN, narcotics and psychotropic substances, illicit export of flora and fauna; antiques and other prohibited goods pose a grave threat to the Indian economy.
"Commercial frauds perpetuated to evade payment of legitimate duty are another area of growing concern. To enable you to deal with these concerns effectively the initiatives taken to improve the infrastructural and technological capabilities at your command need to be rapidly implemented," he added. (ANI)