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Govt to use I-T experience to boost excise collection
March, 06th 2007

Annual information return (AIR) brought in to track income-tax evasion may come handy in excise duty as well. With excise duty being the only indirect tax having failed to reflect the buoyancy shown by other direct and indirect taxes, it is likely to occupy the centrestage in governments plan of things on revenue front.

The third party information system in income-tax annual information return is working in a streamlined manner and is now poised for expansion. The idea now is to use this information in an effective manner in excise, an official said. This is even as the directorate general of excise and customs is identifying transactions, information which could be used to track evasion in excise.

The budget estimates for 2006-07 had placed excise duty collections at Rs 1,19,000 crore. But the revised estimates have pegged it lower at Rs 1,17,266 crore. Budget 2007-08 has already made e-payment of excise duty above Rs 50 lakh mandatory. This move will make it easier for the department to keep tracking easier.

The government had recently asked pan masala and gutkha manufactures to give monthly details of their sales and purchases since the incidence of evasion, according to sources, has been one of the highest in these sectors. The measure may be extended to other sectors, a source said. The government has also brought in penal provisions to curb evasion.

As per these provisions, manufacturers who evade excise could face penal provisions like losing various facilities to the department taking manual control of a factory. Income-tax and customs administration have already undergone an overhaul and now the focus will shift on excise which suffers from various tax exemptions.

The government had to forego revenue of Rs 66,760 crore on account of various excise duty exemptions. The estimate for 2007-08 project about Rs 1 lakh crore in revenue foregone.

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