Service Tax Department will publish list of service tax defaulters

The rev­enue author­i­ty plans to pre­pare a list of ser­vice tax default­ers and pub­lish it. This is part of the arrear recov­ery plan for all indi­rect tax­es, such as cus­toms duty, excise duty and ser­vice tax. “In ser­vice tax law, pro­vi­sion is avail­able for pub­li­ca­tion of the names of default­ers, list should be pre­pared,” min­utes of the con­fer­ence of the Chief Com­mis­sion­ers and Direc­tor Gen­er­al, Cen­tral Board of Excise and Cus­toms (CBEC) said. Zone-wise lists of default­ers of cus­tom and excise duty are already in the pub­lic domain with an advice to pay dues immediately.

The ser­vice tax author­i­ties got the pow­er last year to arrest and pros­e­cute ser­vice tax evaders And a num­ber of arrests have already been made. It may be not­ed that at the end of 2012–13, there were over 17 lakh reg­is­tered ser­vice tax assessees, but only sev­en lakh were fil­ing returns on a reg­u­lar basis. The Finance Min­istry con­sid­ers the rest as evaders, and many of these are also con­sid­ered defaulters.

As on March 31, 2014, the total indi­rect tax arrears stood at around Rs. 1.50 lakh crore. Out of this, arrears of approx­i­mate­ly Rs. 73,000 crore have been stayed by var­i­ous author­i­ties. Fur­ther, lit­tle over Rs.50,000 crore is involved in cas­es where recov­ery has been restrained by the author­i­ties, i.e., the Board for Indus­tri­al and Finance Recon­struc­tion (BIFR), Debt Recov­ery Tri­bunal and Offi­cial Liq­uida­tor (OL) appoint­ed by courts etc., or cas­es in respect of which the ini­tial appeal peri­od is not yet over.

The tax author­i­ties also said that arrears of lit­tle over Rs. 5,300 crore are not recov­er­able, as in those cas­es the assess­es are either not trace­able or do not have assets from which recov­ery can be made. After deduct­ing all these, over Rs. 20,200 crore can be termed as recov­er­able. Accord­ing to the action plan, the indi­rect tax offi­cials have also been asked to focus on recov­er­able arrears.

The oth­er key fea­tures of the plan include fil­ing of revised affi­davits for first charge with BIFR and OL, details of untrace­able default­ers to be elec­tron­i­cal­ly for­ward­ed to nodal offi­cers for tak­ing it up with Finan­cial Intel­li­gence Unit and set­ting up com­mit­tees by Chief Com­mis­sion­ers to write off cas­es expe­di­tious­ly, fil­ing of peti­tions for ear­ly hear­ing in CESTAT (Cus­toms, Excise and Ser­vice Tax Appel­late Tri­bunal) besides others.

Strong arrear recov­ery is part of rev­enue aug­men­ta­tion which also includes audit, anti-eva­sion, adju­di­ca­tion, scruti­ny and the third par­ty information.

All these are crit­i­cal as the Min­istry has a set a tar­get of Rs. 6.23 lakh crore to be mobilised through indi­rect tax­es, which requires a growth rate of 25.8 per cent. How­ev­er, in the first five months (April-August), col­lec­tions grew by just 4.6 per cent.

TAX MATTERS

  Out of 17 lakh reg­is­tered ser­vice tax assess­es, only 7 lakh were fil­ing returns

  Indi­rect tax arrears totalled around Rs. 1.50 lakh crore as on March 31, 2014

  Out of this around Rs. 73,000 crore arrears have been stayed by authorities