Concerned by low excise collections this fiscal, the finance ministry is planning to crack the whip on specific sectors where it feels cases of excise duty evasion is very high.
Topping the list is pan masala and gutkha makers which the Central Board of Excise and Customs (CBEC) thinks evade a huge amount of excise duties. At a meeting earlier during the month, officials of CBEC discussed various ways to ramp up operations against the sector to increase excise duty collections. It has decided to step up both administrative and procedural activities on the sector. Sources said the department is planning to have increase surveillance and audits of these industries and also have more excise personnel posted with them.
The sector is expected to pay about Rs 2,600 crore revenue this fiscal, and so far excise duty collections from it have been abysmally low.
These products reach the consumers directly from the industries through small vendors and so it becomes easier to evade paying excise duty on them, an official pointed out.
The department also plans to step up operations against several other manufacturing sectors as well, where it feels that duty evasion is very high. These include the metal industry, especially manufacturers of iron, steel and copper; plywood makers and producers of plastic goods.
We will use measures similar to what we have planned against pan masala and gutkha manufacturers on these other industries also, the official said.
Excise duty collections in the fiscal have risen steadily, albeit low rate of about 6% to 7% in the first six months of the fiscal.
Collections have risen by 6.5% to Rs 54,654 crore in April to September 2007, compared to Rs 51,334 crore in the same period last year. In September 2007, the government collected Rs 10,186 as excise duty, an increase of 7.2%.
The finance ministry is concerned by these low figures and is concerned that it may be unable to reach its budgeted target of Rs 1,19,000 crore for 2007-08.