Once again faced with the problem of a modest growth in excise duty collections, tax authorities are planning to introduce another round of checks, this time aimed at plastic and metal dealers.
The Central Board of Excise and Customs (CBEC) has found that there is a lot of bogus invoicing in these two industries. ?Dealers by producing such bogus invoices get tax refunds and pay lesser excise duty,? an official source said.
The department now plans to initiate more checks and audits of the invoices to ensure that there are no instances of under reporting by the dealers. ?There will be closer monitoring and cross checking of these invoices,? the official source added.
In fact, the department plans to keep a close watch on small-scale manufacturing industries as it feels that they are the ones which mostly indulge in excise duty evasion.
In a similar move last year, the CBEC had introduced a number of measures to prevent evasion in the pan masala and gutkha industry. Along with more frequent audits and search operations, it also put into place a compounded duty scheme for pan masala and gutkha manufacturers from this year
Meanwhile, the CBEC is also getting ready to operationalise the system of third party information on manufacturers by early next week. As reported by FE earlier, the department will collect data on the lines of the annual information returns (AIR) system of the direct taxes. Electricity dues and transport bills of companies will be used as indicators of their excise duty and service tax liability.
However, despite these measures, collections from excise duty continue to be low. Till August, excise duty collections increased by a meagre 3.7% to Rs 46,122 crore as compared to Rs 44,469 crore till a year ago. Revenue from excise duty is projected to increase at a modest 7.75% to Rs 1,37,874 crore. But with the high evasion in the sector along with the duty cut on fuel, the CBEC is uncertain whether it will be able to achieve the target.
?Growth in excise duty collections is low because of duty cuts on petrol and diesel, besides the misuse of exemptions given to certain areas,? PC Jha chairman CBEC had said last week.