The government is expected to exceed its indirect tax collection target for 2004-05 on account of higher mop-ups in excise and Customs collections.

There are, however, concerns over direct tax collections, where a shortfall of Rs 1,000-2,000 crore (Rs 10-20 billion) is expected, owing to lower buoyancy in income tax.

Data till March 31, available with the finance ministry, indicate that the final Customs duty collection up to the month end is already higher by Rs 1,300 crore (Rs 13 billion) over the revised estimates of Rs 56,250 crore (Rs 562.5 billion) for 2004-05. The Customs duty target has been revised upwards by Rs 2,000 crore (Rs 20 billion).

The government has projected a lower mop-up from Customs duty in the current fiscal at Rs 53,182 crore (Rs 531.82 billion), owing to lowering of the duty, as part of a larger objective to align these rates with those in the Asean countries.

Excise collection at Rs 98,516 crore (Rs 985.16 billion) till March 31 is, however, lower than revised estimates. Officials point out that this figure will increase once the revised data collected till the first week of April are incorporated. The final service tax collection figure is also expected to be marginally higher than the target of Rs 14,150 crore (Rs 141.5 billion).

The government had projected a 25 per cent growth in direct tax collection during 2004-05, which has been pegged at over 30 per cent for 2005-06.