Faced with the problem of low collections of excise duty during 2006-07, the finance ministry is planning to crack the whip on all excise duty evaders in the coming fiscal. Sources said the ministry is likely to introduce more deterrent measures during the course of the year in order to increase compliance.

As a first step, sources said, the finance ministry has asked field formations to book more cases involving excise duty evasion. A North Block official said, So far we have expected taxpayers to pay taxes on their own initiative. But now we have realized we must be introduce more stringent norms.
 
The Central Board of Excise and Customs has already introduced a system where by companies paying excise duty of Rs 50 lakh or more will have to go in for electronic filing, beginning 2007-08.

In January this year, it also introduced a number of deterrent provisions, such as withdrawal of Cenvat credit and monthly payment facility, in order to increase compliance amongst manufacturers.

The ministry is hopeful that all these steps would help increase compliance and in turn increase excise duty collections. However, sources said it will be closely monitoring excise duty collections in the coming fiscal and is collections continue to be low; it will come up with more measures and tighten its excise administration.

So far, the new provisions have helped boost excise duty collections for the fiscal and the CBEC is confident of reaching the revised estimate of Rs 1,17,266 crore for 2006-07, and may even earn a few crores more.

Despite record collections in both direct and indirect taxes, excise duty collections have remained exceptionally low in 2006-07. The finance ministry was infact forced to lower the revised estimates for the fiscal, by Rs 1,734 crore from the Budget estimate of Rs 1,19,000 crore.