CAG on Service Tax
Continuing our series on the CAG’s report, DDT brings you the observations of the CAG on the Service Tax administration. Service Tax is the future tax- Consultants and Audit have to depend on Service Tax for their future. Service Tax was advertised to be a voluntarily complied tax with fewer hassles of law and enforcement, but Audit is determined to take it the levels of Central Excise and thanks to Audit, the litigation industry will thrive.
++ Measures taken by the Department to bring unregistered service providers into tax net proved ineffective and inadequate. Audit identified 376 active but unregistered service providers in 41 Commissionerates of Central Excise, with loss of revenue of Rs 95.21 crore.
++ Service tax of Rs.10.40 crore was not paid by Government undertakings providing consultancy services.
++ Service tax of Rs.52.17 crore on services rendered by Foreign Service providers in India was not paid by 89 assessees receiving taxable services in 37 Commissionerates of Central Excise.
++ Service tax of Rs.6.99 crore was not levied by the Department on 24 technical institutes providing technical consultancy.
++ Service tax of Rs.11.95 crore on account of erection and commissioning activities was not levied by the Department on eight assessees.
++ Service tax of Rs.3.35 crore on account of technical advice, designing and development charges was not levied by the Department.
++ In 64 Commissionerates of Central Excise around 21 per cent of the returns due were not submitted by assessees, while 12 per cent were received late.
++ Inadequate assessment/verification of service tax returns by the Department led to short payment of Rs 27.42 crore on account of suppression of taxable value by assessees in 31 Commissionerates of Central Excise.