New Delhi: Concerned at “sizable” excise duty evasion, Finance Minister P Chidambaram on 7 March 2007 warned that tax evasion would come to “haunt” corporates in the long run.
“I am inclined to believe that there is sizable evasion in excise duty. Evading duties do not pay in the long run. One black mark will haunt you throughout the year,” Chidambaram said after launching the electronic payment system for excise duty and service tax.
Chidambaram wondered why excise duty is not keeping pace with growth in the manufacturing sector. “When the economy is growing at 8.5-9% and manufacturing by double digit, excise collections should also grow at the same rate,” he reasoned.
The Finance Ministry revised down its target of excise duty collections to Rs 1,17,266 crore for this fiscal against the earlier estimate of Rs 1,19,000 crore.
While corporate income tax and service tax collections have gone up considerably, there has not been commensurate increase in excise duty collections, Chidambaram said.
Greater focus would be laid on collecting excise duty during 2007-08, the Finance Minister said.
In December, the excise department had announced to withdraw or restrict certain facilities, like registration of dealers, from those not paying excise duties to the Government.