New Delhi: As part of measures to plug revenue leakage from industries such as steel, chewing tobacco and furnace oil, the government on Tuesday decided to conduct a “high-impact audit” of such units to curb duty evasion.
“There are some concerns about excise... It is one tax where I think there is a high degree of evasion,” finance minister P. Chidambaram told reporters after inaugurating a two-day national conference of Central Customs and Excise Commissioners.
He said this was one of the measures the government has decided on to curb excise evasion.
“The high impact audit must cover assessees, products or sectors which are prone to tax evasion,” Chidambaram said.
Later, Central Board of Excise and Customs chairman S.K. Singhal said the department has found a large number of units in steel, furnace oil and ‘paan masala’ indulging in excise duty evasion.
The high-impact audit would cover these sectors, he said, adding it would be based on certain internal risk parameters to check evasion.
Claiming that as a rule, trend in excise duty collections should follow VAT collections, Chidambaram said the department has been asked to share information with states on specific products, industries and cities to detect non-disclosures.
VAT collection has increased by 24.6% during the first quarter, whereas excise duty has grown by 6.8% year-on-year.
Excise duty collections grew to Rs25,161 crore in the first quarter against Rs23,560 crore in the year-ago period.
Services tax fetched 31.6% more to the exchequer at Rs7,257 crore against Rs5,514 crore in the same period last fiscal. Customs duty collections grew by 20% at Rs23,570 crore against Rs19,677 crore in the year-ago period.
“We are slightly behind on excise, a shade behind on service tax, but at the moment we have no grave concerns with respect to budgetary targets... Now, I am confident that with the economy growing at close to 9%, the department will be able to meet the budget estimates of Rs2,78,013 crore,” Chidambaram said.
Claiming that for the first time, the tax credit taken by industry through Cenvat (Central value-added tax) was higher than tax deposited through personal ledger account as cash, he said: “We have to closely check to ensure that there is no misuse of Cenvat credit.”
On other measures to curb duty evasion, he said it was now mandatory for assessees with duty liability of over Rs50 lakh to make e-payment of excise duty. He said 89% of excise collections are made through e-payment. Eventually, all excise receipts would go online.