« Top Headlines » Open DEMAT Account in 24 hrs  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal «  CBDT may limit exemption on capital gains... Income-tax on gross income or net income?... » Service tax hits excise mop-up August, 07th 2007 For the first time ever, Cenvat credit, utilised by companies to pay taxes, overshot net excise duty collections during fiscal 2006-07.   The finance ministry data show that Cenvat credit utilised by companies grew 34 per cent to Rs 1,28,698 crore in the last fiscal, while net excise duty collections (cash collections) rose 5.8 per cent to Rs 1,17,088 crore.   Service tax collections, which rose 62 per cent to Rs 37,482 crore in 2006-07, are projected to grow 34 per cent to Rs 50,200 crore in 2007-08. That means, companies paid their excise duties more by utilising tax credits available to them, rather than in actual cash.   Experts attribute the 6-7 per cent growth rate in excise collections in recent years to the high service tax that companies pay on business purchases or input services, which they follow up by claiming Cenvat credit. Besides service tax, area-based exemptions, liberalisation of small-scale industry scheme and exports are also adversely affecting central excise revenue.   Other factors contributing to higher Cenvat utilisation include availability of Cenvat credit against special additional Customs duty, dealers invoice and duty paid on capital goods.   Though gross excise collections (net collection and Cenvat utilisation) rose 19 per cent to Rs 2,45,786 crore in 2006-07, the same was not reflected in net excise duty collections (see chart) due to surge in service tax collections.   With an increasing number of business purchases coming under the service tax net, input taxes paid by manufacturers have gone up rapidly. More business-to-business transactions means more input taxes and more credit utilised, said Satya Poddar, partner, Ernst & Young.   He feels that a clearer picture will emerge if service tax collections and Cenvat credit utilisation trends are compared.   By increasing service tax on inputs, the Centre is not getting additional revenue. Instead of focusing on final consumption, the service tax now covered business deals, said Poddar.