The finance ministry has adopted a multi-pronged approach to streamline central excise administration to plug leakages in the slowest-growing tax segment.
The measures include disposing of long-pending excise cases, enhancing the decision-making powers of officers at its commissionerates, better connecting its offices across the country and adding staff, including in the audit team.
Plugging leakages in the excise-collection mechanism is a focus area of the government in the current fiscal, K.M. Chandrasekhar, revenue secretary, finance ministry, had said, shortly after the Budget.
The actual excise collection in 2006-07 was Rs1.17 lakh crore, higher by 4.6% over the previous year’s revised target. Total tax collection in 2006-07 was Rs4.7 lakh crore, an increase of 27% over the earlier year’s revised estimates.
“We have disposed of 98% of the cases pending with the department at the start of 2006-07,” said a finance ministry official who didn’t want to be named. Details of the pending cases were unavailable. Many of the cases pending at the departmental level are largely on technicalities, said S.Madhavan, executive director, tax and regulatory services at PricewaterhouseCoopers.
As a broad move to streamline the administrative mechanism, the Central Board of Excise and Customs has given more powers to commissionerates. The move to reduce pending cases and empower staff is being supplemented by a move to network commissionerates with the headquarters here.
Companies paying excise duty of Rs50 lakh or more have been moved to compulsory electronic filing. The computerization effort aims to generate data that can be mined by different arms of the department to increase administrative efficacy.
The rules allow companies to offset taxes already paid by input suppliers through central value-added tax (Cenvat). As this is believed to be a large source of leakage, the excise department is looking at ways to compare a company’s Cenvat claim with the invoice.