Duty Cut On Crude Products May Hit Tax Mop-Up: Revenue Secy

Government is concerned over meeting its FY11 tax collection target given the high inflation and a possibility of restructuring duties on petroleum products.

In a clear indication of the revenue department's stand, Revenue Secretary Sunil Mitra said that the government would not be able to meet its tax collection targets if petroleum duty restructuring takes place, reports CNBC-TV18 quoting sources.

Mitra said, “From present indications, it seems likely that inflation driven by international commodity prices is likely to be a major anxiety this year. A further tightening of monetary policy in response can impact the growth of corporate income, which may result in growth slowdown of corporate tax collections.”

“Inflation can also affect domestic demand and thereby adversely affect GDP growth, tax collections, etc. A direct factor of anxiety is increasing international prices of crude. Any rollback of customs duty on crude or of excise duty on petroleum products will significantly impact indirect tax collections as well.”