Govt warns tough action against excise, service tax evaders

In a stern warning to evaders of excise, customs and service tax, the government asked them to either pay the dues or face penal action which could include arrest, prosecution and property attachment. "We are keeping a very close watch on such elements. They are advised to come forward and pay all taxes and avail of the benefit of reduced penalty," Revenue Secretary Sumit Bose told reporters.

Those who fail to pay excise duty, he warned, should be prepared to face consequences which would include "provisional attachment of property, arrest and prosecution, suspension of Cenvat credit and 100 per cent penalty and interest". The move comes in the backdrop of moderate growth in the indirect tax collection and the urgency to contain the fiscal deficit to the targeted 5.3 per cent of the GDP.

The Revenue Secretary said government would urge all assesses to ensure they make timely and correct payment of customs duty, excise duty and service tax for continued trade facilitation. "It has been observed that a number of central excise assesses continue removing goods clandestinely, sometime even without registration, misusing Cenvat credit or simply not paying central excise duties which are due to the government in disregard of the law," he said.

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With regard to Service tax, Bose said, it is also noticed that more than half of the service providers who are registered are not filing returns while a number of service providers who should be paying service tax now have not yet registered themselves.

"The Department has also gathered information that a number of service providers are collecting service tax from receivers of service but not depositing the tax with the government," Bose said. "Let we warn them all such service providers will not only be liable to pay the service tax along with interest and penalty which may be equal to the service tax evaded, but they can also be prosecuted for these offences. Money due to them from a third party can be appropriated by the government," he added.

All services are taxable from July 1, 2012, except those in the negative list and exempted services. On the customs side, Bose said, "We have seen that some importers and exporters are indulging in under-invoicing on import or over-invoicing in exports and mis-declaration of goods and are misusing exemptions and various incentive schemes, to evade customs duty".

When 70 per cent of the consignments are being cleared by customs on self assessment basis, without any assessment and examination by Department, it is incumbent upon the importers or exporters to discharge their correct duty liability, he said.

Highlighting some unscrupulous elements are already on the radar of DRI (Directorate of Revenue Intelligence) and intelligence wings of customs houses, he said, such importers and exporters should be ready to face legal consequences including arrest and prosecution, besides payment of duty with interest, fine and penalty upto 100 per cent of duty evaded.

"The only window for them is to come forward and deposit the duty now and avail of the benefit of reduced penalty," he said. Indirect tax collection grew at a moderate rate of 16.8 per cent to Rs 2.92 lakh crore in the April-November period as against the annual growth target of 27 per cent. The government in the current fiscal had proposed to collect from customs, excise and services tax Rs 5.05 lakh crore, an increase of 27 per cent over realisation in the previous fiscal.