Tuesday said the central government was in a position to trace defaulters by constructing their full profile and possessed dossiers on them.
No tax evader could escape the government, he asserted.
"All financial transactions can be traced once you are identified as a tax evader. We can construct a 360 degree profile them," Chidambaram said at a programme.
Delivering the inaugural speech at an interaction with representatives of trade and industry on the Service Tax Voluntary Compliance Enforcement Scheme (VCES), the minister said: "In fact we have such profiles. We have dossiers on them."
He asserted that the government had the option to arrest and prosecute habitual offenders. Already, 13 such peoples have been taken into custody from various parts of the country.
Calling upon traders to utilise the VCES, the minister said it would enable them to come clean.
He mentioned several sectors - construction, couriers, telecom and security services - for failing to deposit with the government the service tax they collected.
He said the service sector comprised 55 percent of the country's Gross Domestic Product, while "a healthy number - 17 lakh - had registered for service tax.
"But of them, only seven lakh pay service tax, and the rest have forgotten. While some are no-filers, some others are stop-filers."
The VCES, in force since May 10, would continue upto Dec 31.