Excise duty evaders, be ware! Big brother is watching. Continuing its close vigil, the Central Board of Excise and Customs (CBEC) is all set to tighten its noose more around such offenders.
Government sources said higher monetary penalties would be imposed on repeat of such duty evasion and more audits would be conducted to tackle the menace. Raids, such as those conducted on pan masala and gutkha manufacturers last year, will also continue.
Earlier in 2007, CBEC had introduced tough measures, including not granting Cenvat credit for inputs, capital goods and input services used by manufacturers found guilty of evasion. Offenders were also asked to pay duty on a daily basis instead of a quarterly basis. These measures were an immense hit, and tax officials are now set to exercise them more stringently.
In the new fiscal, however, CBEC will look at overall excise evasion, while continuing its focus on specific sectors. ?Our main objective will be to penalise those where there is a conscious duty evasion. We are planning a number of stringent measures against them,? the official explained.
With low duty collection in 2007-08, the department had stepped up operations against several manufacturing sectors, which, it felt, engaged in rampant duty evasion. These included pan masala and gutkha manufacturers, the metal industry, plywood makers and producers of plastic goods.
Rampant evasion has hit the government coffers frequently. For instance, in 2006-07, the department was unable to meet its Budget estimate of Rs 1,19,000 crore for excise duty. In the revised estimate for the fiscal it was lowered to Rs 1,17,266 crore. Also, in 2007-08, revenue collection from the duty has continued to be a problem with meager growth.
According to the revised estimate, the government expects an increase of Rs 1,27,947 crore in 2007-08 despite strong performance of the manufacturing sector. In the coming fiscal, excise duties are projected to continue with its modest growth of 7.75% to Rs 1,37,874 crore. Officials, however, attributed the lower growth projection for 2008-09 to a 2% cut in the excise duty rate.