Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)
 Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose
 Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More
 Government proposes to ease tax relief conditions for offshore funds
 TallyPrime Connected Banking: Automating Banking and Accounting
 ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update
 ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide
 Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers
 Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It
 ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes
 Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs

Errant manufacturers in for taxing times
November, 21st 2006

Tax evaders in the manufacturing sector seem to be in for a trouble with the North Block proposing measures to punish them. The Central Board of Excise and Customs (CBEC) on Monday came out with a draft circular proposing to withdraw certain facilities granted in recent years to duty evaders.

According to the proposal, these will include withdrawal of facilities of monthly payment, instead of consignment-wise payment for a specified period as well as not granting Cenvat credit for inputs, capital goods and input services used by manufacturers. Tax authorities would also not permit 80% of provisional refund to such offenders within 15 days of filing of claim to such offenders. For dealers engaging in tax evasion, it could also mean suspension of their registration for some time.
 
These measures would be taken only for pacified offences such as removing goods without the requisite documents or duty payments, undervaluation of goods, taking of Cenvat credit without receipt of goods or on fake invoices. Issue of excise invoices by dealers and manufacturers without delivery of goods and claiming refunds based on fake invoices would also lead to withdrawal of facilities.

However, according to the proposal such measures would only be taken in cases where duty evasion is more than Rs 10 lakh.

To prevent the misuse of these measures, finance ministry intends to empower only the Member (Excise), CBEC to take such decisions. The proposal for withdrawal of facilities would be forwarded by the jurisdictional commissioner or additional director general to the chief commissioner or director general.

Tax experts feel that these measures are bound to lead to greater tax compliance by manufacturers. Principal consultant Pricewaterhouse Cooper Anta Rastogi said, These steps will surely act as a deterrent to duty evasion. However, the government must ensure that these measures are not misused by the tax authorities against law abiding tax payers, especially small manufacturers.

The proposed measures, if accepted, are likely to come in force from January 1, 2007. In recent months, tax authorities have stepped up efforts to catch tax evaders as well as to encourage greater tax compliance. According to official statistics, by September-end, the Directorate General of Central Excise Intelligence had registered 442 cases involving tax evasion of Rs 1,042 crore during the current fiscal.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2026 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting