New Delhi: The Finance Ministry has booked 2181 cases of evasion of service tax in nine months of current fiscal, involving an amount of Rs3491 crore. He urged India Inc. to no longer avoid service tax payment to escape legal and punitive actions.
P C Jha, member, CBEC at a seminar on service tax organized by Assocham confirmed that out of Rs3491 crore of service tax evasion until December 2007, the Finance Ministry had recovered Rs386 crore. During 2006-07, the Ministry detected 4034 cases of evasion, involving an amount of Rs1995 crore out of which Rs554 crore was paid by those who evaded service tax on one pretext or other.
He predicted that by end of fiscal 2007-08, revenue from service tax would have grown by 122 times, the way the government is receiving revenue collections. The contribution of service tax in the total revenue still continues to be small with service sector contribution to GDP increasing from 40% in 1994 to about 55% at present.
The current rate of growth of service sector is about 10% but the contribution of service tax in the total indirect tax collection is only about 18% and its contribution in total tax revenue of the central government is only about 8.6%.
“During the year 2006-07, the total collection from indirect tax was Rs2,40,877 crore out of which collection from service tax was Rs37,483 crore. Remaining amount was Rs1,17,000 crore from excise and about Rs86,000 crore from customs.
In 2007-08, expected revenue from indirect taxes, i.e. customs, excise and service tax collectively was about Rs2,80,000 crore out of which service tax would account for Rs50,200 crore. The collection of service tax during this year is satisfactory and growth so far about 355 which is 1% more than required to achieve the target.
Currently, 100 services are under service tax net with applicable rate of duty of 12.36% and number of such taxpayer have reached 4.75 lakh and the budget estimates from this tax for this year is Rs.50,200 crore. He also informed that the six exclusive service tax Commissionerates at Mumbai, Delhi, Kolkata, Chennai, Bangalore and Ahmedabad have their individual interactive websites. These websites provide assistance to taxpayers in finding out status of their applications and refund claims and in knowing about the procedural or technical requirements.
Revenue department has also set up large taxpayers unit which is a significant measure in the sense that the taxpayers have to remain in touch with one office for the three taxes, i.e. excise, service tax and income tax. In one office also, for all his difficulties, the taxpayer has to contact one officer only, i.e. his own client executive. The first such LTU started functioning at Bangalore w.e.f. October 2006 and the second one has become operational w.e.f 1st December 2007 at Chennai. In future, LTUs would be opened at Dehi, Mumbai and Kolkata also.
During 2006-07, the department made sincere efforts to consolidate circulars/instructions/clarifications issued on various technical and procedural issues. The department has withdrawn 48 circulars and further, two masters circulars have been issued in place of 55 circulars/instructions of the past with the result, now there are only two circulars in place of 103 earlier.