Thursday, July 26, 2007

FM Urges Excise Department To Check Evasion In VAT

NEW DELHI: The excise department could take the assistance of state governments data bank on value-added tax (VAT) collections besides carrying out high-impact audits to track evasion. Finance minister P Chidambaram has urged the department to work closely with the state governments to share information. This exercise was done with Andhra Pradesh, and now they have decided to replicate it all over India. The department could gather data from states on VAT collections in specific products, industries and cities to detect non-disclosure. The exchange of information could assist the department in tracking excise evasion. The excise collections saw a growth of just 6.8% in the first quarter of this fiscal as against a 25% growth in VAT collections. The high-impact audits are a part of the department''s plan to plug revenue leakage from industries such as steel, chewing tobacco, gutkha, copper and furnace oil. The high-impact audit must cover assesse products or sectors which are prone to tax evasion.

The high-impact audits will be based on certain internal risk parameters targeted at detecting evasion. Elaborating on other measures taken to curb duty evasion, the finance minister said it was now mandatory for assesse with duty liability of more than Rs 50 lakh to make e-payment of excise duty. They are slightly behind on excise, a shade behind on service tax, but at the moment we have no grave concerns in respect to budgetary targets. Excise duty collections grew to Rs 25,161 crore in the first quarter against Rs 23,560 crore in Q1FY06, a growth of 6.8%. Service tax fetched 31.6 % more to the exchequer at Rs 7,257 crore against Rs 5,514 crore in the same period last fiscal.

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