Over the next year, the finance ministry will tighten excise administration to mitigate revenue losses, estimated at over Rs20,000 crore—a fifth of excise collected in 2006-07.
“We plan to focus heavily on excise,” K.M. Chandrasekhar, revenue secretary told Mint. “There are some areas of concern, such as the Cenvat utilization, bogus claims and even clandestine movement of goods out of factories which allow manufacturers to bypass excise duties.”
Beginning next fiscal, all companies paying excise duty of Rs50 lakh or more will be required to pay such duties electronically. The ministry was examining a model that would allow a company’s Cenvat claim to be compared with the invoice.
“We hope to be able to introduce this foolproof system within the next two years,” he said. “We will also introduce compulsory e-filing for firms and professionals who come under section 44AB (Income-Tax Act) from next fiscal.” Tax experts say the move would cover all firms whose sales exceed Rs40 lakh in a year and professionals whose receipts exceed Rs10 lakh.
The finance ministry has already made e-filing mandatory for companies.
Chandrasekhar said though the revised estimates for 2006-07 have been pegged lower than the Budget estimate by Rs2,000 crore, it would be made up by the end of the current fiscal.
“We have received information that we have collected Rs2,000 crore more,” he said. “We will actually achieve the excise target for the first time in over a decade.”