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Govt detects Rs 5,995 cr central excise, service tax evasions
August, 09th 2012

The government today said it has detected alleged central excise and service tax evasions of about Rs 5,995 crore during 2011-12.

A total of 450 cases of service tax evasion involving Rs 5,012.90 crore and 350 cases of central excise evasion involving Rs 982.80 crore were registered in the last fiscal, Minister of State for Finance S S Palanimanickam told Lok Sabha in a written reply today.

Of these, Rs 434.27 crore (Service Tax) and Rs 238.79 crore (Central Excise) have been recovered.

The modus operandi adopted for tax evasion of Central Excise duty is, interalia, misuse of CENVAT (Central value Added Tax) credit by way of procuring the invoices only without receiving the goods and also by utilising the common inputs for exempted as well as dutiable goods, misclassification, violation of area based exemption and clandestine production and removal.

"For the evasion of Service Tax, the modus operandi include, interalia, undervaluation, outright evasion, non-payment of Service Tax under reverse charge mechanism," the Minister said.

The measures taken by the Directorate to plug the loopholes include strengthening of intelligence network, identification of evasion prone commodities or services, coordination and sharing of information with other agencies and also issuing modus operandi circulars to the field formations, Palanimanickam said.

As many as 457 cases of service tax evasion involving Rs 4,400.28 crore and 453 cases of central excise evasion involving Rs 1,471.01 crore were registered during 2010-11.

Of these, Rs 291.82 crore (Service Tax) and Rs 127.49 crore (Central Excise) has been recovered.

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