The effects of the economic slow down due to the global financial crisis, has resulted in a five per cent fall in excise and customs collection during October. The decline in indirect tax collection comes at a time when the government is finding it hard to mobilize resources, while expenditure on subsidies and other welfare measures is going up.

The excise collection, decreased by 8.7 per cent to Rs 18,664 crore as against Rs 19,646 crore during the same period a year ago, while customs duty collections declined by 0.9 per cent to Rs 9,265 crore from Rs 9,353 crore in October 2007.

Net direct tax collections rate for seven months of this financial year registering a growth of 29.52 per cent. It stood at Rs166,905 crore up to October 2008 as compared to Rs128,864 crore for the same period of last year. The country remained successful to increase tax collection, despite global slowdown.

Corporate tax increased to 33.49 per cent and stood at Rs105,174 crore as against Rs78,785 crore. Income tax growth rate too increased registering a growth of 23.14 per cent. Fringe benefit tax (FBT) increased by 47 per cent and dividend distribution tax grew above 48 per cent which indicates sound financial health of the  country despite global financial crisis.

Disappointed on the hike in VAT rates, members of Indian Industries Association (IIA) held a demonstration in which over sixty of them were arrested by the police on Monday. However they were set free after three hours.

Annoyed with the State’s decision and henceforth demand to have VAT at par with the other states, the industrialists had earlier proposed to have a car rally which was supposed to end at Patel Park after which they wanted to have a dharna but the administration did not give its approval for the same. On Monday about 250 cars were parked at Moti Mahal but on the car rally’s disapproval, the industrialists resorted to march through the market. On this the police got enraged and arrested them.

The net tax growth by center government registered a growth of 25.51 percent in the month of September. Rs 62,788 crore were collected as compared to Rs 50,025 crore in the corresponding period last year. The growth is witnessed due to starting of an advance tax installment during the month of September.

The increase in TDS receipts and buoyancy in corporate profits led to an increase in the direct tax collection, including corporate and personal income tax, by 46.95% to Rs 71,648 crore in April-July this year.

A finance ministry statement said, “Robust growth in direct tax collections is a result of tax education and compliance mechanism put in place by the Income Tax department in the area of tax deducted at source (TDS) and tax collection at source (TCS) and indicates further improvement in tax administration and tax compliance levels.”

Despite the fear of economic slowdown as a result of continuous rise in the crude oil prices, the net direct tax collections increased by 38.61 per cent in the first quarter.

According to a statement released by the Finance Ministry, the growth in direct tax collections in Nagpur and Kochi witnessed as high as 74.08 % and 68.98% respectively, in the direct tax collection, whereas, it was less than 50% in cities like Mumbai, Bangalore and Kolkata. In the capital city Delhi, the direct tax collection increased to 53.57%.