BENGALURU: Chief Minister Siddaramaiah, who also holds the finance portfolio, on Tuesday asked officials of top revenue-generating departments -- commercial taxes, excise, stamps and registration, transport and mines and geology -- to accelerate revenue collection and warned them that they would be held accountable if targets are not met.
Excise, which contributes 20 per cent of revenue to the state exchequer, is faced with realising an unprecedented revenue target of Rs 38,525 crore for the current fiscal 2024-’25. So far, from April 1 till October 24, the department has collected Rs 20,350 crore and is faced with realising the target of Rs 38,525 crore by March-end next year.
“It is a challenge to realise 100% of the huge revenue target this fiscal. Besides Christmas and New Year, there are no major events during which the sales and consumption peak. They already seem to have plateaued,” said sources on condition of anonymity. “At best, the department may be able to achieve 90-95% of the target by March-end. That too is a high expectation,” they added.
According to sources, the department “shored up Rs 700 crore between September and October after the government, under pressure from the food and beverage industry, rationalised prices of top segment of Indian Made Liquor (IML) in August”.
On August 23, the government had issued two notifications; on the rationalisation of additional excise duty (AED) on IML slabs in the higher segments for retailers and on the minimum declared price for the distillers below which they are not allowed to invoice.
The 18 excise slabs of IML were also brought down to 16. “While sales in the top segments of IML gradually improved after price rationalisation, there has been a dip in the lower segments of IML after there was an increase in the MRP to bring prices of that slab of IML on par with the neighbouring states,” the sources added. The lowest four slabs of IML contribute more than 80 percent of the revenue to the department.
A look at the revenue targets of the excise department over the last few years show a gradual increase ranging between Rs 1000 crore and Rs 1,500 crore between 2018 and 2021.
The trend changed with a heightened jump post the Covid pandemic. In 2020-’21, the revenue target was set at Rs 22,700 crore, which was increased to Rs 24,580 crore for 2021-22 and Rs 29,000 crore in the following FY of 2022-’23. In the 2023-’24 budget the tax revenue for excise was brought to Rs 36,000 crore. The same was raised to Rs 38,525 crore for 2024-’25.