Net customs revenue reportedly grew 26 percent in the first six months of the current fiscal, higher than the 19 percent the government expects in basic customs duties
The government has generated higher-than-expected revenues from customs duties, which may help it rein in the fiscal deficit within its FY19 target of 3.3 percent of gross domestic product, government sources told Business Standard.
Net customs revenue reportedly grew 26 percent in the first six months of the current fiscal, higher than the 19 percent the government expects in basic customs duties.
The Finance Ministry’s port-level data indicates that gross import tax collection (customs and integrated Goods and Services Tax) has registered a 33 percent growth year-on-year between April and October.
Sources in the ministry believe revenue could be even better in H2 FY19 aided by the value of rupee stabilising at a higher level as compared to its average in H1 FY19.
Another reason to support this growth could be higher customs duties applied for the entire H2 as against a gradual rise of rates in the first half.
In his fifth budget, Finance Minister Arun Jaitley raised customs duties on many items, with more hikes following in the July-October period.
India’s non-oil trade deficit contracted in April-June as the government aimed to curb demand for non-essential items and halt the current account deficit due to a rise in oil prices.
India’s non-oil trade deficit grew 35 percent in July, 19 percent in August and 60 percent in September, while the rupee plunged from Rs 68 to Rs 72 (inverse scale) over the same period. These simultaneous activities led to an increase in the landed cost of imports, due to which revenue realisation from revenue increased.
This fiscal, the government expects Rs 96,300 crore in customs duties, higher than FY18’s Rs 80,800 crore, with a monthly revenue of Rs 9,000-10,000 crore.In the current fiscal, all months have seen a healthy customs revenue of over Rs 10,000 crore, except July.