State projects Rs 680 cr excise revenue shortfall in current fiscal year

Lower than expected revenue collection from State excise and stamps and registration, falling fuel prices and likelihood of cut in devolution from the Centre, may result in revenue shortfall by the end of 2014-15 financial year, the government said on Thursday.

In its Mid-Year Review of State Finances 2014-15 submitted in the Assembly, the government has projected about Rs 680 crore revenue shortfall from excise during the year. This is for the first time, in the recent past, revenue from State excise is seeing downward trend. This is despite increasing additional excise duty on beer from 122 per cent to 135 per cent and licence fee of primary distillery and Indian Liquor Manufacturing Distillery and Brewery by 50 per cent in the budget.

Though the report has not cited any specific reason for the trend, official sources said collection target fixed from this revenue source is unrealistic. The government has set an ambitious target of collecting Rs 14,430 crore this year, against Rs 12,600 crore of last year – increase of Rs 1,830 crore.

Revenue from stamps and registration is also likely to witness a shortfall due to recent upward revision of guidance value. People are likely to get dissuaded from buying new property as increase in guidance value shoots up property prices. Tax collection from this source of revenue in the first half of the financial year is less than what was estimated, the report said.

Falling petrol and diesel prices may affect revenue collection. The State government imposes sales tax on fuel. Besides, the government anticipates lower devolution from the Centre in the wake of the Centre reporting shortfall in its revenue collection, the report said stressing the need for restraint on expenditure. The government has also said the State economy may face a slowdown in the current year due decline in growth.